Question
Please show work. A) Griffin Corporation will pay a $5.00 per share dividend next year. The company pledges to increase its dividend by 3 percent
Please show work.
A) Griffin Corporation will pay a $5.00 per share dividend next year. The company pledges to increase its dividend by 3 percent per year, indefinitely. If you require a 16 percent return on your investment, how much will you pay for the companys stock today?
B) The next dividend payment by SAF, Inc., will be $4 per share. The dividends are anticipated to maintain a 6 percent growth rate, forever. If SAF stock currently sells for $45.00 per share, what is the required return?
C) Suppose you know that a companys stock currently sells for $60 per share and the required return on the stock is 18 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If its the companys policy to always maintain a constant growth rate in its dividends, what is the dividend per share that was just paid?
D) Nematode, Inc., has an issue of preferred stock outstanding that pays a $9.50 dividend every year, in perpetuity. If this issue currently sells for $110 per share, what is the required return?
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