Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The company's...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The company's expected dividend growth rates over the next four years are as follows: 23 percent, 35 percent 37 percent, and 30 percent. The company then expects to settle down to a constant-growth rate of 9 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends? (Do not round intermediate calculations. Round final answer to two decimal places.) Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The company's expected dividend growth rates over the next four years are as follows: 23 percent, 35 percent 37 percent, and 30 percent. The company then expects to settle down to a constant-growth rate of 9 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends? (Do not round intermediate calculations. Round final answer to two decimal places.)
Expert Answer:
Answer rating: 100% (QA)
To calculate the present value of the dividends we need to use the dividend discount model which ... View the full answer
Related Book For
Introduction to Management Science A Modeling and Cases Studies Approach with Spreadsheets
ISBN: 978-0078024061
5th edition
Authors: Frederick S. Hillier, Mark S. Hillier
Posted Date:
Students also viewed these finance questions
-
The treasurer of Kelly Bottling Company (a corporation) currently has $200,000 invested in preferred stock yielding 10 percent. He appreciates the tax advantages of preferred stock and is considering...
-
What is meant by hydroboration-oxidation reaction? Illustrate it with an example.
-
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.2 million in anticipation of...
-
Assume that the marginal product of capital is given by the following expression: MPK = 60/K^0.7 (K is measured in trillions). a) Graph the demand curve for capital and find the equilibrium real...
-
The following is the unadjusted trial balance for Rainbow Lodge Ltd. at its year end, May 31, 2018. The company adjusts its accounts monthly. Additional information: 1. An annual insurance policy was...
-
The Highlands Craft Store makes and sells bowls and mugs that are hand-made by local artisans, at their craft store and through their website. Since making these items requires a special type of clay...
-
Bank Reconciliation} Conway Company reported the following information: \section*{Required:} 1. Calculate the amount of outstanding cheques as of December 31. 2. Prepare the journal entries that...
-
(1) What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount or at a...
-
The initial guesses for the root are assumed to be x0=3 and x1=2, for these initial values, f (xO) =28 and f (x1)= 4, what is the angle the secant line makes with the x -axis? Assume that the root of...
-
The Sweet Candy Company includes in its product line a number of different mixed nut products. The Chalet nut mix is required to have no more than 25 percent peanuts and no less than 40 percent...
-
Assuming that Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 5,700 pounds of raw material on hand? Maximum...
-
How do cultural or global factors influence our brand perception, and how can we adapt our marketing strategies accordingly?
-
After her first business trip to a major city, Jayla is alarmed when she reviews her credit card receipts. Both the hotel bill and the car rental charge are in excess of the price she was quoted....
-
1. Write a java code that create the above shown interface which permits to simulate a reservation of a house worker. The frame size is 400*250. Use the necessary layout managers to arrange the...
-
Inputs provided: Current common stock price $50.00 Common stock dividend last year (Do) $2.10 Common stock dividend growth rate 7% Flotation cost to issue new common stock 10% Net issuing price of...
-
From your perspective, how are environmental safety and health (ESH) decisions for purchasing of engineering controls currently being made in the oil and gas industry? After carefully considering...
-
B nd the explicit formula for the given sequence. 1, 5, 25, 125, a=3 a=5"-1 a=3.5-1 9=2.5"-1 -1
-
A. Select a recent issue (paper or online) of Report on Business Magazine, Canadian Business Magazine (online only), Bloomberg Businessweek, Fast Company, The Economist, or another business magazine....
-
For the Dupit Corp. case study introduced in Section 11.4, the management science team was able to apply a variety of queueing models by making the following simplifying approximation. Except for the...
-
Aberdeen Computer Corp. (ACC) is located in Aberdeen, Washington. The company has developed the Web-Surfer, a low-cost e-mail and Web-surfing appliance. This product is manufactured at four plants,...
-
For each of the following statements about using the exponential distribution as the probability distribution of service times, label the statement as true or false and then justify your answer by...
-
More ratio analysis (Learning Objective 4) Big Bend Picture Frames has asked you to determine whether the companys ability to pay current liabilities and total liabilities improved or deteriorated...
-
Compute profitability ratios (Learning Objective 4) Compute four ratios that measure Bonapartes ability to earn profits. The companys comparative income statement follows. The data for 2004 are given...
-
Compute stock ratios (Learning Objective 4) Evaluate the common stock of Shamrock State Bank as an investment. Specifically, use the three stock ratios to determine whether the common stock has...
Study smarter with the SolutionInn App