Question
a. ABC. Inc is expected to pay a dividend of $6.78 per share. The dividends are expected to increase by 8% each year. The required
a. ABC. Inc is expected to pay a dividend of $6.78 per share. The dividends are expected to increase by 8% each year. The required rate of return on the stock is 11%. What is the stock's expected price 10 years from today (i.e., what is P10)?
b. Suppose a company is expected to pay a dividend of $4.5 next year. The dividend is expected to grow at 10.88% each year. If the stock is currently selling for $159.39, what is the required rate of return on the stock?
c. Suppose a company just paid dividend of $16.53. The dividend is expected to grow at 8.04% each year. If the stock is currently selling for $333.59, what is the dividend yield?
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