Constant growth valuation

1. Holtzman Clothiers' stock currently sells for $37 a share. It just paid a dividend of $4 a share (i.e., D₀= $4). The dividend is expected to grow at a constant rate of 6% a year.

1. -Whatstockpriceisexpected1yearfromnow?Roundyouranswertotwodecimalplaces.

Preferred stock rate of return

2. What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 8% of par, and a current market price of (a) $60.00, (b) $78.00, (c) $116.00, and (d) $145.00? Round your answers to two decimal places.

Nonconstant growth

3. Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $0.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 45% per year - during Years 4 and 5; but after Year 5, growth should be a constant 4% per year. If the required return on Computech is 12%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.

Nonconstant growth stock valuation

4. Taussig Technologies Corporation (TTC) has been growing at a rate of 17% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to g_n= 6%.

1. IfD₀=$2.90andr_s=13.00%,whatisTTC'sstockworthtoday?Roundyouranswertothenearestcent.Donotroundyourintermediatecalculations.
2. Whatisitsexpecteddividendyieldatthistime,thatis,duringYear1?Roundyouranswertotwodecimalplaces.Donotroundyourintermediatecalculations.
3. Whatisitscapitalgainsyieldsatthistime,thatis,duringYear1?Roundyouranswertotwodecimalplaces.Donotroundyourintermediatecalculations.