Question: please answer all! In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over

please answer all!
please answer all! In practice, a common way to value a share
of stock when a company pays dividends is to value the dividends

In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.28. The dividends are expected to grow at 13 percent over the next five years. The company has a payout ratio of 35 percent and a benchmark PE of 23 . The required return is 11 percent. What are the projected dividends for each of the next five years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) What is the EPS in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the target sto price in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the stock price today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!