Question: Super Carpeting Inc. ( SCI ) just paid a dividend (D0) of $1.44 per share, and its annual dividend is expected to grow at a
Super Carpeting Inc. ( SCI ) just paid a dividend (D0) of $1.44 per share, and its annual dividend is expected to grow at a constant rate ( 9 ) of 3.00% per year. If the required return (rs) on SCI's stock is 7.50%, then the intrinsic value of SCI's shares is per share. Which of the following statements is true about the constant growth model? When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to an increased value of the stock. When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to a decreased value of the stock. Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.: - If SCI's stock is in equilibrium, the current expected dividend yield on the stock will be per share. - SCI's expected stock price one year from today will be per share. - If SCI's stock is in equilibrium, the current expected capital gains yield on SCI's stock will be per share
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