Question
Q1) Suppose Nabisco Corporation just issued a dividend of $2.15 per share yesterday. Subsequent dividends will grow at a constant rate of 04.40% indefinitely. If
Q1) Suppose Nabisco Corporation just issued a dividend of $2.15 per share yesterday. Subsequent dividends will grow at a constant rate of 04.40% indefinitely. If the required rate of return for this stock is 11.80% , what is the value of a share of common stock today?
Q2) What is the value of a share of preferred stock that promises to pay $1.62 every year, indefinitely, if you have a required rate of return of 11.00%?
Q3) The current price of Janco stock is $13.18. Dividends are expected to grow at 06.80% indefinitely and the most recent dividend paid yesterday was $2.60.
a) What is the required rate of return on Jancos stock?
b) What is the Dividend Yield on Jancos Stock?
c) What is the Capital Gains Yield on Jancos Stock?
Q4) Magnetic Corporation expects dividends to grow at a rate of 17.90% for the next two years.After two years dividends are expected to grow at a constant rate of 03.50% indefinitely.Magnetic's required rate of return is 14.40% and they paid a $2.93 dividend today.Find the value of Magnetic Corporation's common stock per share by computing:
a) Dividend at the end of Year 1:
b) Dividend at the end of Year 2:
c) Dividend at the end of Year 3:
d) Price of stock at end of year 2:
e) Price of stock today:
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