1 Volbeat, Inc. pays an annual dividend on its common stock that is expected to grow...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1 Volbeat, Inc. pays an annual dividend on its common stock that is expected to grow by 4 percent a year forever. The dividend in one year will be $2.35. If the expected return on the stock is 11.5 percent per year, what is the price of the stock today? select here select here 2 a. $15.16 b. $20.43 c. $58.75 d. $31.33 2 Wildernest, Inc. pays an annual dividend on its common stock that is expected to grow by 2.4 percent a year forever. The dividend in one year will be $1.30. If the expected return on Wildernest's common stock is 12.6 percent per year, what is the price of the stock to be in four years? select here select here a. $13.36 b. $13.68 c. $14.35 d. $14.01 3 The expected return of Langhorn stock is 9.5 percent. The company will pay the following dividends: $2.40 in one year, $2.80 in two years, and $3.20 in three years. After the dividend is paid in three years, the dividend is expected to grow by 4.6 percent a year forever. What is the current price of one share of stock? select here select here a. $32.62 b. $61.50 c. $54.07 d. $59.00 Which one of the following statements is false? select here select here 3 a. A common approximation is to assume that in the long run, dividends will grow at a constant rate. b. The value of a stock is equal to the present value of both the dividends and future sales price of that stock which will be received by an investor. c. There is a tremendous amount of certainty associated with the forecast of a firm's future dividends. d. According to the constant dividend growth model, the value of the firm depends on the current dividend level 4 divided by the required return minus the growth rate. select here 1 Volbeat, Inc. pays an annual dividend on its common stock that is expected to grow by 4 percent a year forever. The dividend in one year will be $2.35. If the expected return on the stock is 11.5 percent per year, what is the price of the stock today? select here select here 2 a. $15.16 b. $20.43 c. $58.75 d. $31.33 2 Wildernest, Inc. pays an annual dividend on its common stock that is expected to grow by 2.4 percent a year forever. The dividend in one year will be $1.30. If the expected return on Wildernest's common stock is 12.6 percent per year, what is the price of the stock to be in four years? select here select here a. $13.36 b. $13.68 c. $14.35 d. $14.01 3 The expected return of Langhorn stock is 9.5 percent. The company will pay the following dividends: $2.40 in one year, $2.80 in two years, and $3.20 in three years. After the dividend is paid in three years, the dividend is expected to grow by 4.6 percent a year forever. What is the current price of one share of stock? select here select here a. $32.62 b. $61.50 c. $54.07 d. $59.00 Which one of the following statements is false? select here select here 3 a. A common approximation is to assume that in the long run, dividends will grow at a constant rate. b. The value of a stock is equal to the present value of both the dividends and future sales price of that stock which will be received by an investor. c. There is a tremendous amount of certainty associated with the forecast of a firm's future dividends. d. According to the constant dividend growth model, the value of the firm depends on the current dividend level 4 divided by the required return minus the growth rate. select here
Expert Answer:
Related Book For
Financial Algebra advanced algebra with financial applications
ISBN: 978-0538449670
1st edition
Authors: Robert K. Gerver
Posted Date:
Students also viewed these finance questions
-
The Aldridge Co. is expected to grow at 6% into the indefinite future. Its latest annual dividend was $2.50. Treasury bills currently earn 7% and the S&P 500 yields 11%. a. What price should Aldridge...
-
An overvalued currency is one that is expected to decline in value relative to other currencies. What is the effect on a firm that produces in the country whose currency is overvalued and sells to...
-
An overvalued currency is one that is expected to decline in value relative to other currencies. What is the effect on your firm which produces in the country whose currency is overvalued and sells...
-
You are given the following information: The current gold price is $1,650, the net convenience yield for gold is 1.7% per year, the risk-free rate is 5% per year, the volatility is 30% per year, the...
-
Find the minimum distance between the lines having parametric equations x = t - 1, y = 2t, z = t + 3 and x = 3s, y = s + 2, z = 2s - 1.
-
In the following exercises, you will use the data in the TAL Distributors database shown in Figure 2-1 in Chapter 2. (If you use a computer to complete these exercises, use a copy of the original TAL...
-
Gilead is a large drug producer, with a majority of its prescription drug product sales occurring in the United States. Gilead produces anti-HIV drug therapies, including the drugs Atripla, Truvada,...
-
The following information is available for Cole Bowling Alley at December 31, 2014. Prepare a classified statement of financial position; assume that $13,900 of the notes payable will be paid in2015....
-
Oxygen gas having a volume of 1250 cm 3 at 43.1 C and 1.04 x 10 5 Pa expands until its volume is 1900 cm 3 and its press is 1.08 x 10 5 Pa. Find: (a) the number of moles of oxygen present and (b) the...
-
Eric Brown is responsible for upgrading the wireless network for his employer. He has identified seven possible locations to install new nodes for the network. Each node can provide service to...
-
February Financial Statements Prepare an eight-column work sheet. Complete the financial statements. Journalize and post the adjusting and closing entries. Complete a post-closing trial balance....
-
Unemployment compensation has been a benefit available to most American workers for many decades. This benefit is provided though a combination of State and Federal programs. Funding for these...
-
You are a business consultant at a small consulting firm in Sydney, Australia. A client, Ben McDonald, from office supplies retailer "Office Storeroom" has contacted you to ask for your help. Ben is...
-
Assume the spot Swiss franc is $0.7045 and the six-month forward rate is $0.7040. What is the Value of a six-month call option with a strike price of $0.6845 should sell for in a rational market?...
-
The developing countries were affected more than the developed countries. The developed countries were affected more than the developing countries. The developed and developing countries were...
-
Based on the SAIFM Code of Conduct and the Financial Institutions (Protection of Funds) Act, Do you think the codes of conduct discussed are enough to ensure that Financial Services Providers act...
-
A child's ball ( a thin hollow uniform sphere ) of mass 2 8 . 7 g and radius 0 . 3 3 8 m starts from rest and rolls without slipping down an inclined plane of vertical height 6 . 2 m . What is the...
-
In Problems 718, write the augmented matrix of the given system of equations. f0.01x0.03y = 0.06 [0.13x + 0.10y = 0.20
-
Lindsay invests $80 in an account that pays 5% annual interest, compounded monthly. Michele invests $60 in an account that pays 8% annual interest, compounded weekly. a. Whose balance is greater...
-
Examine the following 21-day credit calendar. The opening balance is Y dollars. On March 23, a purchase of X dollars was made. On March 28, a payment of Z dollars was made. On April 4, a purchase of...
-
Regina deposits $3,500 in a savings account that pays 7 1/2% interest compounded semiannually. a. How much interest does the account earn in the first six months? b. What is the balance at the end of...
-
Find the mean and variance of a sum of random variables.
-
Explain the difference between an estimator and an estimate, and why the least squares estimators are random variables, and why least squares estimates are not.
-
Explain the theoretical decomposition of an observable variable \(y\) into its systematic and random components, and show this decomposition graphically.
Study smarter with the SolutionInn App