Question: 1. Stock Values Collapse Total views: 6 (Your views: 1) A. ABC Corp. just paid a dividend of $1.95 and the dividends are expected to

1. Stock Values 1. Stock Values Collapse Total views: 6 (Your views: 1) A. ABC

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Total views: 6 (Your views: 1)

A. ABC Corp. just paid a dividend of $1.95 and the dividends are expected to indefinitely grow at a constant rate of 4.1% p.a. If investors require a return of 10.2% p.a. on this stock, what is the current value? Value in there years? In 15 years?

B. XYZ Corp's next dividend will be $2.30 per share, and the constant dividend growth rate is 4.5% forever. If the current stock price is $39.85, what is the rate of return that invetors require? What is the dividend yield? Expected capital gains yield?

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