# Question

Peak's Organic Foods' current dividend is $5.00. You expect the growth rate to be 8 percent for years 1 to 5, and 2 percent from years 6 to infinity. The required rate of return on this firm’s equity is 10 percent. Determine the following:

a. The expected dividend at the end of year 5

b. The expected dividend at the end of year 6

c. The expected price of the stock at the end of year 5 (immediately after the year 5 dividend)

d. The price of the stock today

a. The expected dividend at the end of year 5

b. The expected dividend at the end of year 6

c. The expected price of the stock at the end of year 5 (immediately after the year 5 dividend)

d. The price of the stock today

## Answer to relevant Questions

Peele Clothiers Ltd.'s current dividend is $3.60. Dividends are expected to grow by 9 percent for years 1 to 3, 6 percent for years 4 to 7, and 2 percent thereafter. The required rate of return on the stock is 12 percent. ...JINX Ltd. had earnings per share of $5 as at December 31, 2012, but paid no dividends. Earnings were expected to grow at 15 percent per year for the following five years. JINX Ltd. will start paying dividends for the first ...Apex Financial Ltd. is interested in investing in Scion Systems Inc. Scion's current dividend is $5.50 and its shares are selling for $40. The required rate of return for firms like Scion is 8 percent. Apex has conducted an ...The preferred shares of Chinook Electrical Co. have a par value of $100 and a dividend rate of 8 percent. The current price is $110. If the risk-free rate is 2 percent, what is the risk premium associated with these ...You observed the following daily returns for two companies, ABC and DEF.a. Calculate the following for each stock:i. Five-day cumulative returnii. Geometric mean daily returniii. Arithmetic mean daily returnv. Standard ...Post your question

0