At the end of the year 2022 Great Lakes Corporation paid dividends $4.47 per share. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
At the end of the year 2022 Great Lakes Corporation paid dividends $4.47 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2023 14% 2024 11% From year 2025 onward growth in dividends is expected to remain constant at 2% per year. The required rate of return for this stock is 10.42%. Calculate the economic value of the stock now (end of the Year 2022). At the end of the year 2022 Great Lakes Corporation paid dividends $4.47 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2023 14% 2024 11% From year 2025 onward growth in dividends is expected to remain constant at 2% per year. The required rate of return for this stock is 10.42%. Calculate the economic value of the stock now (end of the Year 2022).
Expert Answer:
Answer rating: 100% (QA)
The formula for the Gordon Growth Model is V D1 r g Where V Intrinsic value of the stock D1 Divi... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
Students also viewed these finance questions
-
Read the following case study: https://www.pmi.org/learning/library/scope-project-stakeholder-management-8277 Prepare a report as an essay, summarizing the responses to the questions below. 1....
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Assume that self-esteem measurements are not affected by an interaction between subject self-esteem and target self-esteem. Is there sufficient evidence to support the claim that the category of the...
-
An oil film (n = 1.46) floats on a water puddle. You notice that green light ( = 538 nm) is absent in the reflection. What is the minimum thickness of the oil film?
-
The performance of a particular type of laser-based inspection equipment was investigated. Assume that the standard deviation of the number of solder joints inspected on each run is 1.2. If = .05 is...
-
Dave Parrett, sales manager for Ace Chemicals, is wrestling with the issue of how to get Kay Powers back on track. Kay has been with the company for 20 years. Historically, she had been one of the...
-
1. The film sequence shows three people interacting in a work environment. Which aspects of organizational behavior discussed in this chapter appear in this sequence? 2. The three people in this...
-
Mason and John operate a computer consulting service as a general partnership. Their partnership agreement states that each partner's share of the profits will be prorated according to the number of...
-
The dependency diagram in Figure indicates that authors are paid royalties for each book that they write for a publisher. The amount of the royalty can vary by author, by book, and by edition of the...
-
Your team is planning an eight day 1200 km road trip in Canadaand trying to decide which car to rent. You have two options: Option 1: A Prius that costs 40 USD per day, averages 48 mpg, andhas an...
-
Given the following rate diagram for a Markov Process: 4 3 a. Develop the rate matrix A 6 9 1 b. Develop the probability matrix P 5 7 c. In which state will we stay the longest average time and why?
-
Sketf the graph /1- (29) and find the area enclosed
-
Determine the coordinate direction angle 3 and 7 of the resultant force acting on the flag pole. FB = 690 N and FC = 530 N
-
Let u(x, t) be the solution in [0, 1] [0, +) of the problem 4uxx Utt = a)Find f(1/3), where u|x=0= ur=1 = 0 ult=0 = 4 sin (7x), ut t=0 = 30x(1-x) f(t) = [ [u(x, t) + 4u(x, t)] dr Hint: the integral...
-
Franklin Kite Company, a kite manufacturer in Philadel- phia, Pa., needs $10,000 to retool its assembly line to produce the next generation of the "electric kite." As a finance officer with the...
-
Write a paper on the topic of Juveniles. Research paper on the the effectiveness of any policy/issue directly related to punishment (ex. death penalty, private jails/prisons, drug courts, pretrial...
-
Classify each of the following activities as proper or prohibited under the various consumer statutes you have studied. a. Calling a hospital room to talk to a debtor who is a patient there. b....
-
Assume Highline Company has just paid an annual dividend of $0.96. Analysts are predicting an 11% per year growth rate in earnings over the next five years. After then, Highlines earnings are...
-
If Jims adjusts its payout policy to 70% of net income, how will the net new financing change? the following income statement and balance sheet for Jims Espresso Income Statement Sales Costs Except...
-
Andyco, Inc., has the following balance sheet and an equity market-to-book ratio of 1.5. Assuming the market value of debt equals its book value, what weights should it use for its WACC calculation?...
-
According to the monetary approach to the balance of payments, what type of economic policies would help a country resolve a balance of trade deficit?
-
If two countries had identical term structures of interest rates, what is the expected future exchange rate change between the two currencies?
-
Assume that the cost of a particular basket of goods is equal to $108 in the United States and 14,000 in Japan. a. What should the U/$ exchange rate be according to absolute purchasing power parity?...
Study smarter with the SolutionInn App