Question
(A). What is the expected annual capital gain for Orange Corp stock, based on the Dividend Growth Model? The company plans to pay an annual
(A). What is the expected annual capital gain for Orange Corp stock, based on the Dividend Growth Model? The company plans to pay an annual dividend of of $7.01 per share in one year. The expected annual growth rate of the dividend is 9.81%, and the required rate of return for the stock is 13.62%. Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).
(B). Use the Dividend Growth Model to compute the expected price of a stock in 3 years. Each share is expected to pay a dividend of $8.11 in one year. Investors' annual required rate of return is 18.6%, and the expected growth rate of the dividend is 5.7% per annum. Answer to the nearest penny.
(C). Use the Dividend Growth Model to compute the expected price of a stock today. Each share just paid a dividend of $5.47. Investors' annual required rate of return is 15.6%, and the expected growth rate of the dividend is 3.6% per annum. Answer to the nearest penny.
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