Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 31, 2024

Ameritech Corporation paid dividends per share of $3.56 in 2018, and dividends are expected to grow 5.5% a year forever. The investors required rate of

Ameritech Corporation paid dividends per share of $3.56 in 2018, and dividends are expected to grow 5.5% a year forever. The investors required rate of return is 10%. What is the value per share, using the Gordon Growth Model? The stock is trading for $80 per share. What would the growth rate in dividends have to be to justify this price?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions

Question

Let be a sample space, A an event of that space and B1, B2,, Bn be pairwise disjoint events in with P(Bi) > 0 for all i. Assume further that P(A|Bi) = p for all i = 1, 2,, n. If the event B is...

Answered: 1 week ago

Question

★★★★★

1. Make a list of the elements that are interrelated or interdependent. Then write a paragraph stating why it is critical to monitor these elements closely. 2. Decide on the boundaries and ultimate...

Answered: 1 week ago

Question

★★★★★

On Jan. 1, 2020 ABC Co. purchased, as a long term investment, 1,000 shares of XYZ Co. stock for $110,000. During 2020 XYZ Co. paid out $30,000 in total cash dividends and had a net loss of $20,000....

Answered: 1 week ago

Question

★★★★★

please answer the 3rd part of this question 1. What is the amount of Apple's accounts receivable as of September 29, 2018? 2. Compute Apple's accounts receivable turnover as of September 29, 2018. 3....

Answered: 1 week ago

Question

★★★★★

ENTS 2015 99. The probability that a senior HS student in NJ is enrolled in an AP class is 0.32. Sarah randomly selects 6 seniors from NJ. Let X = number of seniors that are enrolled in AP classes....

Answered: 1 week ago

Question

★★★★★

Noguchi Company manufactures cooling systems. Noguchi produces all the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: Manzer Inc....

Answered: 1 week ago

Question

★★★★★

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution...

Answered: 1 week ago

Question

★★★★★

Kelly Corporation had these transactions during 2017 (2pts.). Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity....

Answered: 1 week ago

Question

★★★★★

Is technology indeed making processes such as damage assessment more comprehensive and safer for responders? Discuss.

Answered: 1 week ago

Previous Question Next Question