Next year you expect the Bluth Company to pay a dividend of $3.50. You also expect...
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Next year you expect the Bluth Company to pay a dividend of $3.50. You also expect the dividend to grow at 4% a year indefinitely, and you would require a 12% return to hold the stock. What is the highest price you would be willing to pay? Price B - Next year you expect Sitwell Industries to pay a dividend of $5.00. You also expect the dividend to grow at 12% for the 3 years after that and then at 5% for every year after that. If you need to earn an 8% return to hold the stock, what is the highest price you would be willing to pay? Price Year 1 2 3 4 Price Dividend C- Dunder Mifflin Inc just paid a dividend of $1.20. You expect that the dividend will grow at 20% a year for each of the next three years, and then you expect the growth rate to decrease by 1 percentage point each year until it reaches 4%, at which point the growth rate will stabilize. If you need to earn at least a 10% return to hold the stock, what is the highest price you would be willing to pay? Next year you expect the Bluth Company to pay a dividend of $3.50. You also expect the dividend to grow at 4% a year indefinitely, and you would require a 12% return to hold the stock. What is the highest price you would be willing to pay? Price B - Next year you expect Sitwell Industries to pay a dividend of $5.00. You also expect the dividend to grow at 12% for the 3 years after that and then at 5% for every year after that. If you need to earn an 8% return to hold the stock, what is the highest price you would be willing to pay? Price Year 1 2 3 4 Price Dividend C- Dunder Mifflin Inc just paid a dividend of $1.20. You expect that the dividend will grow at 20% a year for each of the next three years, and then you expect the growth rate to decrease by 1 percentage point each year until it reaches 4%, at which point the growth rate will stabilize. If you need to earn at least a 10% return to hold the stock, what is the highest price you would be willing to pay?
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To find the highest price you would be willing to pay for each stock you can use the dividend discou... View the full answer
Related Book For
Principles of Managerial Finance
ISBN: 978-0133507690
14th edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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