Carlson Enterprises' common stock dividend is expected to grow at 4% per year. The dividend recently paid

Question:

Carlson Enterprises' common stock dividend is expected to grow at 4% per year. The dividend recently paid was $2.00 per share and the required return is 10%.

a. What is the estimated value of the common stock?

b. If the value of a common stock was $50 per share and dividends were currently $1.50 but were expected to grow at 6% per year, what would be the required rate of return?

c. If Carlson's dividends grew at 7% instead of 4%, what would be Carlson's stock price?

d. If investors' required rate of return increased from 10% to 12% and dividends grew at 7%, what would be Carlson's stock price?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...