Question
1.What is the price of a share of stock if the dividend next period is expected to be $0.88 per share, the required return is
1.What is the price of a share of stock if the dividend next period is expected to be $0.88 per share, the required return is 12% and the dividend growth rate is 2% (both stated as APRs with quarterly compounding)?
2. What is the price of a share of stock if the dividend next period is expected to be $0.88 per share, the required return is 10% and the dividend growth rate is 2% (both stated as APRs with quarterly compounding)?
3. A stock just paid a dividend of $0.75. This quarterly dividend is expected to grow at a rate of 4% in perpetuity. What is the price of the stock if the required return is 12% (all rates are APR with quarterly compounding)?
4. A stock just paid a dividend of $0.75. This quarterly dividend is expected to grow at a rate of 4% for the next 10 years, after which it will remain stable (have zero growth) in perpetuity. What is the price of the stock if the required return is 12% (all rates are APR with quarterly compounding)?
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