Question: I'm having problems solving these questions QUESTION 1 Company D is expected to pay a dividend of $3.5 once a year. It is expected to
I'm having problems solving these questions
QUESTION 1
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"Company D is expected to pay a dividend of $3.5 once a year. It is expected to sell for $40 1 year from today. The equity cost of capital is 15%. What is the expected capital gain rate from the sale of this stock 1 year from today? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, enter 0.05 as an answer."
QUESTION 2
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"A stock is expected to pay $8 per share every year indefinitely. The current price of the stock is $20. The equity cost of capital for the company is 15%. What price would an investor be expected to pay per share 2 years into the future? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
QUESTION 3
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"Company Z is expected to pay a $5.1 dividend at the end of this year. You expect Company Z's dividend to grow by 4% per year forever. Company Z's equity cost of capital is 20% What is the value of a share of Company Z's stock? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
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