1. A company has just paid an annual dividend of $2 and announces that it will grow...
Question:
1. A company has just paid an annual dividend of $2 and announces that it will grow by 3% indefinitely. Assuming the required return on the stock of the company is 10%, calculate the value now of a share of stock in the company.
2. A company’s preferred shares pays a constant dividend of $2 per year. Calculate the value now of a share of preferred stock assuming the required return on the stock is 10%
3. A value of $1,000 occurs now. Calculate the value 20 quarters from now given a rate of 34.885% per half decade.
4. A value of $2,327 occurs now. Calculate the value 9 years from now given a rate of 2% per quarter.
Please show your work.
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen