Problem 17 Intro ABC Corp. has just paid a dividend of $0.53. ABC has an annual required return of 12.11%. 18 - Attempt 1/10 for 10 pts. Part 1 If dividends are annual and expected to be constant, what is the value of the stock? 4.38 Correct Using the no-growth dividend discount model: D P= T 0.53 0.1211 = 4.375 Attempt 1/10 for 10 pts. Part 2 What is ABC's dividend yield? 12.11% Correct Dividend yield Annual dividend Stock price 0.53 4.375 0.1211 Part 3 | Attempt 2/10 for 10 pts. From now on, assume that the dividend of $0.53 was a quarterly dividend. What is the quarterly discount rate? 0.03028 Try again Try again See solution (-2 pts.) Attempt 2/10 for 10 pts. Part 4 What is the value if dividends are constant and quarterly? 1+ decimals Previous answers: 17.51 Submit Part 5 IB | Attempt 2/10 for 10 pts. We now think that dividends will grow by 0.3% from quarter to quarter. The firm just paid the quarterly dividend of $0.53. What is the value of the stock? 1+ decimals Previous answers: 19.49 Submit Part 6 1B Attempt 2/10 for 10 pts. A different analyst thinks that ABC's dividends will grow by 5% for the next 4 quarters, and then grow by 0.3% thereafter. What is the value of the stock? 1+ decimals Previous answers: 23.25 Submit