A zero growth common stock pays the annual dividend of $ 1.75 per share at the end of each year.  If the required rate of return on the common stock is 11.2 %, what is the price per share of the common stock today? 

 

2. Thames Inc.'s most recent dividend was $2.6 per share (D₀ = $2.6).  The dividend is expected to grow at a rate of 5% per year.  The risk-free rate is 4% and the return on the market is 10%. The company's beta is 1.5 Please show your work

A.  What is the required rate of return on the stock, k_s? 

 

B.  What is the price of the stock today, P₀?  

 

C.  What is the price of the stock three years from now, P₃?  

  

3.  Conner Corporation has a stock price of $50 per share. The just patd dividend was $ 3.5 per share (D₀ = $3.5).  The long-run growth rate for the company is 8%. Please show your work

 

A. What is the company's dividend yield?

Answer rating: 100% (QA)

To calculate the price per share of a zerogrowth common stock we can use the formula for the price of a perpetuity P D k Where P Price per share D Ann... View the full answer