Question
1. Thress Industries just paid a dividend of $3.75 a share (i.e., D0 = $3.75). The dividend is expected to grow 4% a year for
1. Thress Industries just paid a dividend of $3.75 a share (i.e., D0 = $3.75). The dividend is expected to grow 4% a year for the next 3 years and then 14% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to the nearest cent.
- D1 = $
- D2 = $
- D3 = $
- D4 = $
- D5 = $
2.Boehm Incorporated is expected to pay a $2.00 per share dividend at the end of this year (i.e., D1 = $2.00). The dividend is expected to grow at a constant rate of 6% a year. The required rate of return on the stock, rs, is 17%. What is the estimated value per share of Boehm's stock? Round your answer to the nearest cent.
3. Woidtke Manufacturing's stock currently sells for $27 a share. The stock just paid a dividend of $3.25 a share (i.e., D0 = $3.25), and the dividend is expected to grow forever at a constant rate of 8% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. $
What is the estimated required rate of return on Woidtke's stock? Round the answer to three decimal places.
4. Nick's Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $55 a share. What is the stock's required rate of return (assume the market is in equilibrium with the required return equal to the expected return)? Round the answer to two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started