Suppose you know that a companys stock currently sells for $76 per share and the required return
Question:
Suppose you know that a company’s stock currently sells for $76 per share and the required return on the stock is 10.8 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Step by Step Answer:
We know the stock has a required return of 12 percent a...View the full answer
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Related Video
The dividend yield or dividend–price ratio of a share is the dividend per share, divided by the price per share. It is also a company\\\'s total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage.
Students also viewed these Business questions
-
Suppose you know that a company's stock currently sells for $47 per share and the required return on the stock is 11 percent. You also know that the total return on the stock is evenly divided...
-
Suppose you know that a companys stock currently sells for $72 per share and the required return on the stock is 11.5 percent. You also know that the total return on the stock is evenly divided...
-
Stock Valuation Suppose you know that a companys stock currently sells for $60 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly...
-
Suppose the United States imposes a tariff on imported sugar. What are the consequences of this on consumers, domestic and foreign producers, and land use?
-
On the basis of data collected from metal shredders across the nation, the amount x of extractable lead in metal shredder residue has an approximate exponential distribution with mean = 2.5...
-
A friend studies a first-order reaction and obtains the following three graphs for experiments done at two different temperatures. (a) Which two graphs represent experiments done at the same...
-
To what extent can international negotiations over economic policy be seen as a game of strategy? Are there any parallels between the behaviour of countries and the behaviour of oligopolies?
-
Andrew, Bea, Carl, and Carl, Jr. (Carl's son), and Tetra Corporation own all of the single class of Excel Corporation stock as follows: Andrew, Bea, and Carl are unrelated. Bea owns 75% of the Tetra...
-
Question Given the following A = 240 Acres. h = 30ft 2:$ = 20% Sw=25% Reservoir temp (T) = 180 F Pressure (p) = 4000 Psi Abandonment Pressure = 500 Psi Presse after 8 years = 2800 psi Assume specific...
-
Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $110 (without chair). The cost of each desk follows: The...
-
Douglas, Inc., is expected to maintain a constant 3.9 percent growth rate in its dividend indefinitely. If the company has a dividend yield of 5.6 percent, what is the required return on the companys...
-
Griffith Corp. pays a constant $8.75 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on...
-
Kyoto Distribution markets CDs of the performing artist A. A. Bondy. At the beginning of March, Kyoto had in beginning inventory 1,500 Bondy CDs with a unit cost of $7. During March Kyoto made the...
-
Hank Allbright purchased a previously owned, two year old Ford Taurus for $8,900. Since he purchased the car, he has already invested the following amounts in the car: New stereo system New high...
-
A company is depreciating 9 8 8 0 0 0 building using a straight - line rate of 5 % . The building has an estimated residual value of 1 9 7 6 0 0 . what would the amount depreciation be in the first...
-
Credit Suisse In Crisis Switzerland's second-largest bank and the world's eighth-largest bank, Credit Suisse is on the verge of collapsing. How did Credit Suisse's situation got out of hand? In 2022...
-
You owe $7,000 to a credit card. You decide to pay more than the minimum required and you want to repay the balance in 60 months. The loan charges an interest rate of 1.3% every month. What is the...
-
Assume we have a PLAM for $450,000 mortgage with a 30 year term and monthly payments. The "real" loan rate is 3%, with inflation rates of 3, 4, and 5% for years 1, 2, 3, respectively. What is the...
-
Of all right circular cylinders with a given surface area, find the one with the maximum volume. The ends of the cylinders are closed.
-
In Problems, solve each system of equations. x + 2y + 3z = 5 y + 11z = 21 5y + 9z = 13
-
Several publicly traded companies have issued more than one class of stock. Why might a company issue more than one class of stock?
-
Do you agree or disagree with the following statement: In an efficient market, callable and noncallable bonds will be priced in such a way that there will be no advantage or disadvantage to the call...
-
If interest rates fall, will the price of noncallable bonds move up higher than that of callable bonds? Why or why not?
-
Consider the following data for Wooster Company. Total variable manufacturing costs, including direct material costs, were $3 per unit; the standard production rate was 10 units per machine hour. For...
-
Database Management Systems: Writing Investigate and write about non-relational data storage and retrieval systems In the past 15 to 20 years, data storage and retrieval systems dubbed "NoSQL"...
-
Use the resources here, or find some on your own, and let's discussion what NoSQL is, why it is used, and how can we manage databases with NoSQL - if we can? If you had to choose, would you use SQL...
Study smarter with the SolutionInn App