7. Constant growth stocks

Super Carpeting Inc. just paid a dividend (D0D0) of $1.92, and its dividend is expected to grow at a constant rate (g) of 2.80% per year.

If the required return (rsrs) on Supers stock is 7.00%, then the intrinsic, or theoretical market, value of Supers shares is ($68.57, $48.91, $27.43, OR $46.90) per share.

Which of the following statements is true about the constant growth model?

A. When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to an increased value of the stock.

B. When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to a decreased value of the stock.

Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.:

If Supers stock is in equilibrium, the current expected dividend yield on the stock will be

7. Constant growth stocks

Super Carpeting Inc. just paid a dividend (D0D0) of $1.92, and its dividend is expected to grow at a constant rate (g) of 2.80% per year.

If the required return (rsrs) on Supers stock is 7.00%, then the intrinsic, or theoretical market, value of Supers shares is per share.

Which of the following statements is true about the constant growth model?

When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to an increased value of the stock.

When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to a decreased value of the stock.

Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.:

	If Supers stock is in equilibrium, the current expected dividend yield on the stock will be (4.31%, 4.20%, 2.87%, OR 4.09%) per share.
	Supers expected stock price one year from today will be ($48.33, 45.71, 46.90, OR 29.00) per share.
	If Supers stock is in equilibrium, the current expected capital gains yield on Supers stock will be (2.75%, 103.05%, 3.05%, OR 3.66%) per share.

per share.