Question: please answer 1-4 using the formulas provided. please dont use excel Chapter 8 Homework: Please answer the following questions, showing your work. Upload a pdf
Chapter 8 Homework: Please answer the following questions, showing your work. Upload a pdf file or word file of your completed answers to Canvas by Wednesday, October 11, at 2:00 PM. Note that there are four pages. 1. Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $4.40 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a return of 8.50 percent on your equity investments? Hint: P0=RD 2. Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $7.80 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to carn a return of 5.80 percent on your equity investments? Hint: P0=RD 3. In one year, Bold Betties Inc. will pay a \$3 per share dividend and it is expected to grow by 3 percent per year. If the required return on this stock is 12 percent, what is the current stock price? Hint: P0=RgD0(1+g)=RgD1 4. In one year, Bold Betties Inc. will pay a \$6 per share dividend and it is expected to grow by 4 percent per year. If the required return on this stock is 10 percent, what is the current stock price? Hint: P0=RgD0(1+g)=RgD1
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
