Constant Growth and Zero Growth Dividend Valuation Model (Answer all Please)

Drop down List Part

- 0.11, 9.38, 10.67 or 1.60 - select the best answer - select the best answer

Fill in the Blank Part

- 8.25%, 5.80%, 8.70 or 7.82 - 32.00, 35.62, 21.37 or 33.76

Next Part

- Select the best answer

Fill in the Blank Part - competitive bidding or negotiating underwriting -3.00%, 2.56%, 0.26% or 2.50% - select the best answer

Thank you in advance!

10. Constant growth and zero growth dividend valuation model Aa Aa Urban Drapers Inc., a draperies company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $3.52 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend in the foreseeable future and that dividends are not expected to increase. If you are an investor who requires a 33.00% rate of return and you expect dividends to remain constant forever, what will be your valuation for Urban Drapers stock today? Urban Drapers has a sister company named Super Carpeting Inc. Super Carpeting Inc. just paid a dividend (Do) of $2.64, and its dividend is expected to grow at a constant rate (g) of 5.50% per year. If the required return (ke) on Super's stock is 13.75%, what is the stock price of Super's shares? O $33.76 per share O $38.40 per share O $35.62 per share $48.00 per share Which of the following statements is true about the constant growth model? O The constant growth model implies that dividends remain constant from now to a certain terminal year. O The constant growth model implies that dividend growth remains constant from now to infinity. Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.: If Super's stock is in equilibrium (that is, where the stock price is equal to the market value of the stock), the current expected dividend yield on the stock will be Super's expected stock price one year from today will be per share. Apart from listing shares on stock markets and issuing IPOs, companies often resort to alternative sources of funding. Consider the following case, and then answer the question that follows: In April 2005, Petrosearch Energy Corporation announced the sale of $12.6 million of common stock at a price of $1.36 per share to a group of accredited investors consisting of U.S.-based investment funds. The previous case is an example of: O Public cash offering O Shelf registration O Private placement A firm decides to raise capital and has made a preliminary decision to sell a block of securities to the entity that makes the highest offer. This procedure is referred to asa Consider the case of Scorecard Corp.'s public cash offering. Hurray Bank was the underwriter in the deal. Hurray Bank sold 700,000 shares to the public at $11.20 per share. Scorecard Corp. received $7,644,000 from the public offering. What was Hurray Bank's underwriting spread in this deal? In general, underwriters receive lower spreads for which of the following? O Competitively bid utility issues O Negotiated industrial offers