Question
1. A company just paid a per share dividend of $1.50. Dividends are expected to increase by 2.8 percent annually. What is one share of
1. A company just paid a per share dividend of $1.50. Dividends are expected to increase by 2.8 percent annually. What is one share of this stock worth today if the appropriate discount rate is 12 percent? (Show your formula/equation/calculations)
2. A Corporation common stock pays a constant annual dividend of $2.75 a share. If the discount rate is 12.50 percent, what is the value of this stock today? (Show your formula/equation/calculations)
3. A firm has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 4 percent annually. The last dividend it paid (T = 0) was $1.0 a share. What will be the company's dividend three years from now? (Show your formula/equation/calculations)
Kindly show the formula used to get the answer to further my understanding. Thank you in advance!
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