Question: 1 . Assume you require 1 1 . 2 % return. A company has common stock which just paid a dividend of $ 4 .

1. Assume you require 11.2% return. A company has common stock which just paid a dividend of $4.16(at moment 0). Dividends forecast to grow 29% for the upcoming five years (years 1-5). After year 5, the growth of the stock's dividends is expected to change to a sustainable rate of 4.0% forever. What is the maximum price you should pay for this stockat the present moment?
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter90.1234
2. A company has common stock currently selling for $51.03. It just paid a dividend of $2.14(at moment 0). If you demand 11.7% return, what percent growth of dividends would make this a worthwhile investment?
Enter your answer as a percentage with two decimal places, but without the percent symbol. For example, if your answer is 90.1234%, enter90.12
3. Assume you require 12.0% return. A company has common stock with dividends forecast for the upcoming five years (years 1-5) as shown below. At the end of year 5, the stock is expected to have a dividend payout ratio of 28% and PE ratio of 10.50 times. What is the maximum price you should pay for this stockat the present moment?
012345
Dividends 1.15702.11433.31704.22295.2513
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter90.1234
4. A company has common stock currently selling for $58.25. It is expected to pay a dividend of $3.85 one year from now. If you demand 12.1% return, what percent rate growth of dividends would make this a worthwhile investment?
Enter your answer as a percentage with two decimal places, but without the percent symbol. For example, if your answer is 90.1234%, enter90.12
5. Assume you require 14.8% return. A company has common stock which just paid a dividend of $2.58(at moment 0). Dividends forecast to grow 59% for the upcoming five years (years 1-5). After year 5, the growth of the stock's dividends is expected to change to a sustainable rate of 4.8% forever. What is price is predicted for this stock at the end of year 5(i.e.,what is the terminal value)?
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter90.1234
6. Assume you require 10.4% return. A company has common stock with dividends forecast for the upcoming five years (years 1-5) as shown below. After year 5, the stock's dividends are expected to have a growth rate of 4.0%. What price should be predicted for this stock at the end of year 5(i.e.,what is the terminal value)?
012345
Dividends 1.18541.58032.05542.74943.5527
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter90.1234
7. A company has common stock which just paid a dividend of $4.24(at moment 0). For the next five years, the dividends are expected to grow 18% per year, then growth will slow to a sustainable rate. At the end of year 5, the stock is expected to have a dividend payout ratio of 40% and PE ratio of 12.12 times. What is price is predicted for this stock at the end of year 5(i.e.,what is the terminal value)?
Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter90.1234

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!