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DONT ROUND SHOW FULL ANSWER 1A.) Suppose Nabisco Corporation just issued a dividend of $2.74 per share yesterday. Subsequent dividends will grow at a constant
DONT ROUND SHOW FULL ANSWER
1A.) Suppose Nabisco Corporation just issued a dividend of $2.74 per share yesterday. Subsequent dividends will grow at a constant rate of 3.4% indefinitely. If the required rate of return for this stock is 12.17% , what is the value of a share of common stock today?
1B.) What is the value of a share of preferred stock that promises to pay $4.13 every year, indefinitely, if you have a required rate of return of 11.99%?
1C.) The current price of Janco stock is $23.22. Dividends are expected to grow at 04.60% indefinitely and the most recent dividend paid yesterday was $2.04.
- What is the required rate of return on Jancos stock?
- What is the Dividend Yield on Jancos Stock?
- What is the Capital Gains Yield on Jancos Stock?
1D.) Magnetic Corporation expects dividends to grow at a rate of 10.40% for the next two years. After two years dividends are expected to grow at a constant rate of 05.70% indefinitely. Magnetics required rate of return is 12.69% and they paid a $1.42 dividend today. Find the value of Magnetic Corporations common stock per share by computing:
- Dividend at the end of Year 1:
- Dividend at the end of Year 2:
- Dividend at the end of Year 3:
- Price of stock at end of year 2:
- Price of stock today:
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