A company has common stock currently selling for $42.95. It just paid a dividend (at moment 0),

Fantastic news! We've Found the answer you've been seeking!

Question:

A company has common stock currently selling for $42.95. It just paid a dividend (at moment 0), and dividends are expected to grow 4.5% per year forever. If you require 9.0% return, what must the dividend have been at moment 0?

Related Book For answer-question

Intermediate Financial Management

ISBN: 978-1285850030

12th edition

Authors: Eugene F. Brigham, Phillip R. Daves

See More Books

Posted Date: Nov 05, 2023 06:34 AM

See More Questions

A bond just purchased pays annual interest of 10 percent. In seven years it matures at its face value of $25,000. What price was paid if current yields on a bond of this risk are 8.5 percent? 2. A...
What is Sullivans Year 0 investment outlay on this project? What is the expected nonoperating cash flow when the project is terminated? Sullivan Corporation, a multiproduct corporation, is a leading...
XYZ Corporation preferred stock promises to pay a dividend of $3.25 per share at the end of each year forever. What is its value to an investor who requires a rate of return of 12%? 2. You are...
Debbie plans to buy a house for cash instead of paying a mortgage. She is willing to set aside $12 000 at the end of each year for 15 years. She puts her savings in a Tax Free Savings Account (TFSA)...
Four boxes are placed on a uniform 28-lb wooden plank which rests on two sawhorses. Knowing that the weights of boxes B and D are 9 lb and 90 lb, respectively, determine the range of values of the...
Paul has his home and its contents insured under a Homeowners 3 (special form) policy. He carries $160,000 of insurance on the home, which has a replacement cost of $200,000. Explain the extent to...
Fresh Food Direct, LLC, entered into a lease agreement with Jet Star Realty, LLC. Fresh Food terminated the lease before its terms end, and the parties disputed the amount of rent that Fresh Food...
Three Point Sports Inc. manufactures basketballs for the Womens National Basket-ball Association (WNBA). For the first 6 months of 2017, the company reported the following operating results while...
Thompson's Hardware spent $46,370 this year on business insurance alone. If total sales were $765,500, what percent of total sales was spent on business insurance? Round to the nearest tenth.
Alex Vera organized Succulent Express at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions: a. Terry Mason invested $30,000 in Succulent...
The Fibonacci sequence is defined formally by setting Fa=0, F =1, and then later terms are defined by the recursive formula F+Fa-F. Vn> 1. (**) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 En|0 1 1 2 3 5 8...
Imagine that you are the marketing director of an advertising agency and you must present a proposal on the services provided by the agency. The client owns a sports equipment store and wants to...
Woody Company has the following balances for the current month: Indirect materials used $1,799 Direct labor 6,673 Sales salaries 11,504 Indirect labor 1,871 Production manager's salary 11,080...
Your CFO has supplied you with the following information. Current product standard costs are as follows: Selling price per unit: $5,000 $1,400/unit direct material $400/unit direct labor $200/unit...
how to calculate valuation of a company based off statement of cash flow, balance sheet, income statement, and stock history ?Explain
North Division has the following information: Sales $1190000 Variable expenses 649000 Fixed expenses 620000 If this division is eliminated, the fixed expenses can be allocated to the company's other...
How do the structure and number of carbons affect the solubility of alcohols in water? Based on the samples used, which alcohol: is most readily oxidized? Why do you think this is so?
How can a promoter avoid personal liability for pre-incorporation contracts?
Assuming that the required rate of return is determined by the CAPM, explain how you would use the dividend growth model to estimate the price for Stock i. Indicate what data you would need, and give...
Crisp Cookware's common stock is expected to pay a dividend of $3 a share at the end of this year (D1 = $3.00); its beta is 0.8; the risk-free rate is 5.2%; and the market risk premium is 6%. The...
How could you use the nonconstant growth model to find the value of the stock? Here you can assume that the expected growth rate starts at a high level, then declines for several years, and finally...
What is the adverse selection problem?
Automobile insurance companies charge lower rates to married individuals than they do to unmarried individuals. What economic reason is there for such a practice? Is it fair?
An advanced degree is required to teach at most colleges. In what sense is this a form of restricting entry through licensure?

A company has common stock currently selling for $42.95. It just paid a dividend (at moment 0),

Question:

Expert Answer:

To calculate the dividend at moment 0 D0 we can use the Gordon Growth Model also known as the Divide... View the full answer

Intermediate Financial Management

Students also viewed these finance questions