Being a newly appointed analyst at Credit Suisse, one of your prime role is to facilitate the Global head of valuations in providing detailed and timely analysis The next meeting is being scheduled for the upcoming Saturday, and you are required to calculate the price of a few stocks and provide their valuations The information is mentioned below The Walgreens Boots alliance Company has recently paid dividend D 0 $3, and growth is expected to remain 5 throughout The required rate of return is 10 Calculate dividend streams for the next 2 years, and their PVs You have forecasted NIKE dividends of $5, $5 70, and $5 95 over the next three years respectively After the end of three years the anticipated selling market price of NIKE will be $135 What is NIKE stock price provided a 7 expected rate of return Merck Co is predicted to pay $ 1 70 dividend in one year Further, the market is forecasting a growth in the companys dividend by 3 per year Given rate of return of 8 in this category, what is stock price of Merck Co to be in the third (3) year

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 23, 2024

Being a newly appointed analyst at Credit Suisse, one of your prime role is to facilitate the Global head of valuations in providing detailed and

Being a newly appointed analyst at Credit Suisse, one of your prime role is to facilitate the Global head of valuations in providing detailed and timely analysis. The next meeting is being scheduled for the upcoming Saturday, and you are required to calculate the price of a few stocks and provide their valuations. The information is mentioned below:

The Walgreens Boots alliance Company has recently paid dividend D₀ = $3, and growth is expected to remain 5% throughout. The required rate of return is 10%. Calculate dividend streams for the next 2 years, and their PVs?
You have forecasted NIKE dividends of $5, $5.70, and $5.95 over the next three years respectively. After the end of three years the anticipated selling market price of NIKE will be $135. What is NIKE stock price provided a 7% expected rate of return?

Merck & Co. is predicted to pay $ 1.70 dividend in one year. Further, the market is forecasting a growth in the companys dividend by 3% per year. Given rate of return of 8% in this category, what is stock price of Merck & Co. to be in the third (3) year?