Question
Consider a stock that that has just paida dividend of $1.02. The dividend is expected to grow at a constant rate of 2.3% every year.
Consider a stock that that has just paida dividend of $1.02. The dividend is expected to grow at a constant rate of 2.3% every year. The current price of the stock is $28.62. What rate of return are investors expecting? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response belowrounded to2 DECIMAL PLACES.
B) A stock pays a dividend of $2.14 annually. If the dividend yield is 4.7%, what is the price of the stock? Enter your response belowrounded to2 DECIMAL PLACES.
C) Currently, Queen Inc. pays no dividends. However, analysts forecast that in 3 years Queen Inc. will pay its first annual dividend of $2.3 and dividends will grow at 4.7% per year thereafter. If stocks with similar risk to the equity of Queen Inc. currently earn 12.9%, estimate the current share price of Queen Inc. Enter your answer belowrounded to2 DECIMAL PLACES.
D) A preferred stock will have an annual dividend next period of $1.31 that will be paid in perpetuity. The discount rate is 11.7%. What is the current price of the stock? Enter your response belowrounded to2 DECIMAL PLACES.
Step by Step Solution
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Step: 1
A To calculate the rate of return expected by investors for a stock we can use the Gordon Growth Mod...Get Instant Access to Expert-Tailored Solutions
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Step: 2
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