Assume that the average firm in C&J Corporation's industry is expected to grow at a constant...
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Assume that the average firm in C&J Corporation's industry is expected to grow at a constant rate of 4% and that its dividend yield is 7%. C&J is about as risky as the average firm in the industry and just paid a dividend (Do) of $1.25. Analysts expect that the growth rate of dividends will be 50% during the first year (90,1 = 50%) and 20% during the second year (01,2 = 20%). After Year 2, dividend growth will be constant at 4%. What is the required rate of return on C&J's stock? What is the estimated intrinsic price per share? Do not round intermediate calculations. Round the monetary value to the nearest cent and percentage value to the nearest whole number. Po: $ 11 % Assume that the average firm in C&J Corporation's industry is expected to grow at a constant rate of 4% and that its dividend yield is 7%. C&J is about as risky as the average firm in the industry and just paid a dividend (Do) of $1.25. Analysts expect that the growth rate of dividends will be 50% during the first year (90,1 = 50%) and 20% during the second year (01,2 = 20%). After Year 2, dividend growth will be constant at 4%. What is the required rate of return on C&J's stock? What is the estimated intrinsic price per share? Do not round intermediate calculations. Round the monetary value to the nearest cent and percentage value to the nearest whole number. Po: $ 11 %
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Average industry growth rate g is 4 Average industry dividend yiel... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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