my question is Q 1, stock values, thank you !
Chapter 8 Stock Voltion 7. Growth Rate growth rate in & Voting Rights between U.S. Po 9. Corporate F h Rate In the context of the dividend growth model, is it true that the rate in dividends and the growth rate in the price of the stock are identical? Rights 1031 When it comes to voting in elections, what are the differences U.S. political democracy and U.S. corporate democracy? orate Ethics ILO3] Is it unfair or unethical for corporations to create classes Use in Price ghts Or une porteons, whock are Voting Rich 10. 11. Stock Valuati ut the expense because owing stary such 12. Two-Stag of stock with unequal voting rights? ing Rights LO3] Some companies, such as Google, have created classes of ck with no voting rights at all. Why would investors buy such stock! ck Valuation (LO1] Evaluate the following statement: Managers should not cus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. Two-Stage Dividend Growth Model (LO1] One of the assumptions of the two- the growth model is that the dividends drop immediately from the high growth rate to the perpetual growth rate. What do you think about this assumption? What happens if this assumption is violated? Voting Rights (LO3) In the chapter, we mentioned that many companies have been under pressure to declassify their boards of directors. Why would investors want a board to be declassified? What are the advantages of a classified board? 14. Price Ratio Valuation (LO2] What are the difficulties in using the PE ratio to value 13. stock? QUESTIONS AND PROBLEMS COM 1. Stock Values [LO1] The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate BASIC of 4 percent per year indefinitely. If investors require a return of 10.5 percent on The Questions Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years? 2. Stock Values (LO1] The next dividend payment by Halestorm, Inc., will be $2.04 per share. The dividends are anticipated to maintain a growth rate of 4.5 per cent forever. If the stock currently sells for $37 per share, what is the required return? 3. Stock Values (LO1] For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield? 4. Stock Values (LO1] Caan Corporation will pay a $3.56 per share dividend next year. The company pledges to increase its dividend by 3.75 percent per year indefi- nitely. If you require a return of 11 percent on your investment, how much will you pay for the company's stock today? 5. Stock Valuation (LO1] Tell Me Why Co. is expected to maintain a constant 3.9 per- cent growth rate in its dividends indefinitely. If the company has a dividend yield of 5.9 percent, what is the required return on the company's stock? 6. Stock Valuation (LO1] Suppose you know that a company's stock currently sells for $63 per share and the required return on the stock is 10.5 percent. You also know the stock is evenly divided between a capital gains yield and a in constant growth rate
