Question: Please explain the answer in simple form. Problem The growth in dividends of XYZ, Inc. is expected to be 10% per year for the next

 Please explain the answer in simple form. Problem The growth in

Please explain the answer in simple form.

Problem The growth in dividends of XYZ, Inc. is expected to be 10% per year for the next two years, followed by a growth rate of 5% per year for three years; after this five-year period, the growth in dividends is expected to be 2% per year, indefinitely. The required rate of return on XYZ, Inc. is 12%. Last year's dividends per share were $2.00. What should the stock sell for today? $25.21 Problem The growth in dividends of ABC, Inc. is expected to be 15% per year for the next three years, followed by a growth rate of 8% per year for two years; after this five-year period, the growth in dividends is expected to be 3% per year, indefinitely. The required rate of return on ABC, Inc. is 13%. Last year's dividends per share were $1.85. What should the stock sell for today? $27.74 Problem Mature Products Corporation produces goods that are very mature in their product life cycles. Mature Products Corporation is expected to pay a dividend in year 1 of $2.00, a dividend of $1.50 in year 2, and a dividend of $1.00 in year 3. After year 3, dividends are expected to decline at a rate of 1% per year. An appropriate required rate of return for the stock is 10%. What should the intrinsic value of the stock be? $10.57 Problem The market capitalization rate on the stock of Fast Growing Company is 20%. The expected ROE is 22% and the expected EPS are $6.10. If the firm's plowback ratio is 90%, calculate the P/E ratio. 50 Problem: High Tech Chip Company paid a dividend last year of $2.50. The expected ROE for next year is 12.5%. An appropriate required return on the stock is 11%. If the firm has a plowback ratio of 60%, what should be the dividend in the coming year? $2.69

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