Question: Please show the steps on how to calculate questions using a texas instruments BAII Plus calculator 1. A stock just paid a dividend of $1.00
Please show the steps on how to calculate questions using a texas instruments BAII Plus calculator
1. A stock just paid a dividend of $1.00 per share. Analysts expect dividends to grow at a rate of 20% for three years, 15% for the following two years, and then slow to a constant rate of 10% thereafter. How much would an investor be willing to pay for this stock if her required return is 14%?
-- answer = $38.33
2. What is the share value if the company makes a capital investment and a constant growth rate of 3% is expected?
-- answer = $4.29
3. Mars Corporation just paid a $0.90 per share annual dividend to its common stockholders. The company is expected to pay annual dividends of $1, $1.10, $1.25, and $0.90 over the next four years, then the annual rate of growth will level out to about 8%. What is the value of this stock if the discount rate is 14%?
--answer = $12.69
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