Question
Hello, need to check these answers. Please show as much detail with answer as possible so I can figure them out to study. Thank you
Hello, need to check these answers. Please show as much detail with answer as possible so I can figure them out to study. Thank you
1) Pref. Stock of a firm is expected to pay a dividend of $3.50 per share forever. Stock has =1.8 , expected return on market is 12% and risk free rate is 4%. What is expected return of stock and value of this stock.
2) Firm just paid a dividend of $3.00 and the dividend will grow at a constant rate of 10% forever. Required Rate of Return is 16%. What is the value of the stock?
3) Stock just paid a dividend of $4.00. The stock will grow at a constant rate of 11%. Current market price is $44.00. What is required rate of return?
4) Stock has a market price of $30.00 and just paid a dividend of $3.00 Stock's required return is 14%. Based on this info the dividends will grow at a constant rate of ______ % ?
5) Risk free rate is 2.00% , market risk premium is 5.00% and a stock's beta () is 1.10 The stock just paid a dividend of $2.10 which is expected to grow at 20% for the next two years and 3% forever after that. Stock should sell for $____?
6) Firm paid dividends of $2, $2.4 and $2.88 for the past three years. Last year there was a required 12% return for this stock, CEO recently announced that the firm will only generate enough cash to pay debt holders this year and also in the future. What is the value of the stock today?
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