Tata Consumer Products just paid a dividend of 1.49 and anticipates a short term growth rate of 15% for year 1 and for year 2 (dividends 1 and 2).    Assuming that after year 2, Omni's contract with the City of Detroit will give it a constant growth rate of 4%, what is the fair-value of a share if the required return is 11%?

Q: Colgate-Palmolive Company has just paid an annual dividend of $0.91. Analysts are predicting an…

A: As per the given information: Annual -dividend paid = $0.91Growth rate in earnings over the next…

Q: What must be the expected growth rate

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: Omni Consumer Products just paid a dividend of 1.34 and anticipates a short term growth rate of 16%…

A: Using Dividend Discount Model

Q: During the past 7 years, Burger Flippin’ Corp.’s earnings have grown from $0.78 to $1.95 per share.…

A: The term required rate of return is the minimum rate that the shareholders expect from the company…

Q: The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on…

A: Given: Year 1 to 4 growth rate = 21% Recent dividend = $2.80 Constant growth rate = 5% Required…

Q: Old Nova Inc. just paid its dividend of €5 per share yesterday, which is expected to grow by 1.5%…

A: Value of stock can be found by the present value of dividend and present value of growth of…

Q: BM expects to pay a dividend of $8 next year and expects these dividends to grow at 3.15% a year.…

A: IBM Share Price = Dividend Next Year / (Cost of Equity - Growth Rate)

Q: Upsilon Utilities Inc. expects a constant growth rate of 2% in its dividend payments. If the company…

A: The expected dividend in year 1 (D1) is $3. The growth rate (g) is 2%. The current share price (P)…

Q: BBP, Inc., has experienced a recent resurgence in business as it has gained new national identity.…

A: Using Dividend Discount Model

Q: Nu-Tek, Inc. is expecting a period of intense growth so have decided to retain more of their…

A: Data given: Dividend paid last year = $1.80 per share Annual divided to reduce for next 3 years =…

Q: Percy Grainger & Company currently earns $3.00 per share and the company plans to pay 40% of its…

A: The required rate of return is the return company estimated on the basis of past information and…

Q: Storico Co. just paid a dividend of $1.45 per share. The company will increase its dividend by 24…

A: D0 = $1.45;Year1 growth rate = g1 = 24%;Year 2 growth rate, g2 = g1 - 6% = 24% - 6% = 18%Year 3…

Q: You have been .asked to estimate the weighted average cost of capital (WACC) for Germina Corp., a…

A: The question is based on the concept of Financial Management.

Q: MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be 4%…

A: given, D0=RM2r=10%g=7% The growth rate in dividend is expected to be 4% for the first year, 5% for…

Q: Storico Co. just paid a dividend of $2.65 per share. The company will increase itsdividend by 20…

A: Calculation of Price of Stock Today:Excel Spreadsheet:

Q: You are told by your investment advisor that Laduma Co. is expected to earn R5 per share next year,…

A: Computation as follows: Hence, the value of share is R 47.33. The present market price of share is…

Q: A7X Corp. just paid a dividend of $2.20 per share. The dividends are expected to grow at 25 percent…

A: The share price is the current market price of the share. It is the price of the share at any…

Q: Last year Artworks, Inc. paid a dividend of $1.60. You anticipate that the company’s growth rate is…

A: Here, concept of Dividend growth model is to be used. It is a stock valuation method which is used…

Q: Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The…

A: Dividend for current year = $1.25 Growth Rates are 25%,30%,35%,30% and then 8% constant for future.…

Q: a. Dividends would continue to stay at P10 per share. b. The value of equity

A: 1) Correct Answer = Option a= Dividends would continue to stay at P 10 per share.

Q: Ornaments, Inc., is an all-equity firm with a total market value of $608,000 and 26,200 shares of…

A: Earnings per share It is the entity’s net profit that is divided by a number of outstanding common…

Q: The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on…

A: Explanation : We can Calculate the Share Price with the help of Dividend paid by company in future…

Q: Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $1.45 at…

A: 1) Mature companies with relatively predictable earnings Earnings for a mature company can be…

Q: AFW Industries has 201 million shares outstanding and expects earnings at the end of this year of…

A: The mathematical equation for computing the value is: Values in $million

Q: City Cement Company just paid a dividend of SAR2 per share. The dividend is expected to grow at a…

A: Given: Current dividend = 2 Growth rate = 19% Constant growth rate = 4% Cost of equity = 17%

Q: Harmony Corporation will pay a dividend of RM1.50 a share next year. After this, earnings and…

A: A company has several sources from where it can raise funds. It can issue equity shares and the…

Q: Eastern Electric currently pays a dividend of about $1.96 per share and sells for $33 a share. a. If…

A: The cost that a company is willing to pay to raise the fund for the business operations of the…

Q: Wildhorse Corp. is a fast-growing company whose management expects it to grow at a rate of 30…

A: The question is to find the dividend amount at different future time intervals with the given growth…

Q: Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 32 percent for the…

A: The dividend discount model is used to calculate the current the price of stock by adding of all of…

Q: The Emco Steel Company has experienced a slow (3 percent per year) but steady increase in earnings…

A: Introduction: Dividend policy of the company is characterised as a financial strategy for…

Q: nts company is expected to pay dividends that will grow at a 21% rate from year 1 to year 4, with…

A: Current intrinsic price of the stock is the discounted value of the future cashlows arising from…

Q: Sheridan, Inc., is expected to grow at a constant rate of 6.50 percent. If the company’s next…

A: This question is to be solved using dividend discount model of constant growth according to the…

Q: Fresno Corp. is a fast growing company whose management expects it to grow at a rate of 30% over the…

A: Formulas:

Q: What is the cost of internal common equity (retained earnings) if the long-term growth in dividends…

A: The cost of retained earnings doesn't involve any explicit cost but involves the opportunity cost.…

Q: CompuCon is a new firm that just paid an annual dividend of $2.25 per share. The firm plans to…

A: Dividend discount model: It is based on an assumption that the existing stock price of any company…

Q: Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all…

A: Dividend discount model is a security valuation method which is used to forecast or predict the…

Q: The SkyLink Corporation just paid a dividend of $2.75 to its that it expects the dividends to grow…

A: Dividend discount model It is used to value a stock. The sum of the present value of all future…

Q: You are told by your investment advisor that Laduma Co. is expected to earn R5 per share next year,…

A: Formulas:

Q: You are told by your investment advisor that Laduma Co. is expected to earn R5 per share next year,…

A: The ratio which denotes the percentage of earnings which should be paid as dividend is known as…

Q: Redan, Inc., is expected to maintain a constant 6.05 percent growth rate in its dividends,…

A: Required return of company = Growth rate of dividend + Dividend yield

Q: IoT Inc., is in the business of measuring Southwest Water’s water demand in Exeter. At the end of…

A: Dividend at end of year = 4 Retention Rate = 40% Dividend Payout Ratio = 1-Retention Rate = 1 - 40%…

Q: Storico Co just paid a dividend of $315 per share. The company will increase its dividend by 20…

A: Dividend at 0th time, D0 = 3.15/share Dividend for next year, D1  =3.15*(1+20%) =3.78 Dividend for…

Q: ATX Corp. just paid a dividend of $1.20 per share. The dividends are expected to grow at 30 percent…

A: This question relates to the non-linear growth model of dividends. We can compute the stock price by…

Q: Antiques "R" Us is a mature manufacturing firm. The company just paid a dividend of $11.30, but…

A: The price of a share today is the intrinsic value of share which can be determined by discounted…