Question: The note at the bottom is the revised second sentence from question #6. I have no idea how to solve for these, can someone please
The note at the bottom is the revised second sentence from question #6. I have no idea how to solve for these, can someone please help by showing the step by step solution to each of the following 4 problems? The problems are stock valuation problems Inc. is not expected to pay any dividends for the next 10 years. Starting in year 6. LD 11, it will pay a constant (i e. level) dividend of Five years from today, it is projected pay an initial dividend of per share. If your required rate of return is 18%, how much should you pay for a share of LJD's common stock? 7. How would the previous question change if LJD also paid a dividend of $5 each year for each of the next 10 years? 8. Your company's expects to pay a $100 dividend for each of the next two years. Following that dividend, dividends are expected to grow 50% annually for each of the subsequent 2 years, and 20% in the year after that. At that point, dividend growth will then settle down to a constant, steady state rate of 4% per year. Assuming a required rate of return of 14%, what should your company's stock sell for today? 9. Using the information from question #8, what should the price of the stock be in one year's time? Constant
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