Ted McKay has just bought the common stock of Ryland Corp. The company expects to grow...

 

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Ted McKay has just bought the common stock of Ryland Corp. The company expects to grow at the following rates for the next three years: 30%, 25%, and 15%. Last year the company paid a dividend of $2.50. Assume a required rate of return of 10%. Compute the expected dividends for the next three years and also the present value of these dividends. XYZ IS EXPECTED TO GROW AT 40%, 30%, 20% OVER THE NEXT 3 YEARS AND AFTER THAT IT IS EXPECTED TO GROWTH AT A NORMAL RATE OF 7% A YEAR. IF YOUR REQ RATE OF RETURN IS 16% FOR THIS TYPE OF INVESTMENT, WHAT PRICE DO YOU CONSIDER AS FAIR PRICE IF CURRENT DIVIDENDS ARE $3.00 PER SHARE? ABC HAS A 20 YEAR BOND WITH 7% COUPON PAID ANNUALLY AND IS PRICED $944.00. IF ISSUANCE COSTS ARE 3%, WHAT IS COST OF BOND TO ABC? IBM PREF SHARE WITH $100.00 PAR IS PRICED $92.00 TODAY. ISSUANCE COSTS ARE 3%. WHAT IS COST OF PS TO IBM? AFTALE ATT COMM STOCK IS PRICED AT $32.00, RECENT DIV WAS $2.25 AND GROWTH RATE IS 5%. WHAT IS COST OF RE EARNINGS FOR ATT? WA* *** * ATT STOCK IS $32.00 WITH CURRENT DIV OR $2.25.00 AND GROWTH RATE OF 5%. ISSUANCE COSTS ARE $5.00 PER SHARE Ted McKay has just bought the common stock of Ryland Corp. The company expects to grow at the following rates for the next three years: 30%, 25%, and 15%. Last year the company paid a dividend of $2.50. Assume a required rate of return of 10%. Compute the expected dividends for the next three years and also the present value of these dividends. XYZ IS EXPECTED TO GROW AT 40%, 30%, 20% OVER THE NEXT 3 YEARS AND AFTER THAT IT IS EXPECTED TO GROWTH AT A NORMAL RATE OF 7% A YEAR. IF YOUR REQ RATE OF RETURN IS 16% FOR THIS TYPE OF INVESTMENT, WHAT PRICE DO YOU CONSIDER AS FAIR PRICE IF CURRENT DIVIDENDS ARE $3.00 PER SHARE? ABC HAS A 20 YEAR BOND WITH 7% COUPON PAID ANNUALLY AND IS PRICED $944.00. IF ISSUANCE COSTS ARE 3%, WHAT IS COST OF BOND TO ABC? IBM PREF SHARE WITH $100.00 PAR IS PRICED $92.00 TODAY. ISSUANCE COSTS ARE 3%. WHAT IS COST OF PS TO IBM? AFTALE ATT COMM STOCK IS PRICED AT $32.00, RECENT DIV WAS $2.25 AND GROWTH RATE IS 5%. WHAT IS COST OF RE EARNINGS FOR ATT? WA* *** * ATT STOCK IS $32.00 WITH CURRENT DIV OR $2.25.00 AND GROWTH RATE OF 5%. ISSUANCE COSTS ARE $5.00 PER SHARE

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