Question
Company A has a current stock price of $250 and is expected to pay a $6 dividend in one year. The equity cost of capital
"Company A has a current stock price of $250 and is expected to pay a $6 dividend in one year. The equity cost of capital is 7.5%. What price would its stock be expected to sell for immediately after it pays the dividend? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
"Company B is expected to pay dividends of $1.95 every 6 months for the next 4 years. If the current price of Company B stock is $20, and Company B's equity cost of capital is 15%. What price would you expect the stock to sell for at the end of 4 years? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
"Company C pays a dividend of $6 per share and is expected to pay this amount indefinitely. The equity cost of capital is 15%. What is the price of the stock? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."
"Company D is expected to pay a dividend of $3.5 once a year. It is expected to sell for $35 1 year from today. The equity cost of capital is 15%. What is the expected capital gain rate from the sale of this stock 1 year from today? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, enter 0.05 as an answer."
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