1. Flare Stock will pay the dividend of $2.4 this year. Its dividend yield is 10%. At...
Question:
1. Flare Stock will pay the dividend of $2.4 this year. Its dividend yield is 10%. At what price is the stock selling?
2. An oil company has issued preferred stock with $10 annual dividend that will be paid in perpetuity.
a. If the discount rate is 14%. What price must the stock sale?
3. Integrated Potato chips paid a $2 per share dividend yesterday. It is expected to grow steadily at the rate of 4% per year.
a. What is expected dividend in each of next 3 years?
b. If the discount rate of the stock is 12%. At what price will the stock sell if the forecasted price at the end of third year is $20?
c. What is the expected price after 3 years if today it is selling for $15?
4. A company paid dividend $12. Company is expected to grow the dividend at 10% per year for next 3 years and then at 6% per year forever. What is the price of stock at the end of third year if your discount rate is 14%?
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe