Quantitative Problem 11 Hubbard Industries just paid a common dividend, D, of $1.40. It expects to grow at a constant rate of 2% per year. If investors require a return on equity, what is the current price of Hubbard's common stock? Do not round Intermediate ciculations. Round your answer to the nearestent per share Zero Growth Stods: The constant prowth model is sufficiently general to handle the case of a soro growth stock, where the dividend is expected to remain content over time. In this situation, the content For Note that this is the same equation developed in Chapter 5 to value a perpetuty, and it is the same equation used to valuta perpetual preferred stock that entries its owners to rear, we dividend payments in perpetuity. The valuation equation is simply the current dividend divided by the required rate of retum Quantitative Problem 2: Carlyle Corporation has perpetual preferred stock opstanding that para a constant annust vidend et $1.40 at the end of each year, Invernes require a 10% run on the preferred stock, what is the price of the firm's perpetual preferred stock Round your answer to the nearest cont. per share Nanconstant Growth Stacks For many companies, it is not appropriate to assume that dividends will grow a constant rate. Most im go through fe cycles where they experience different growth rates tunne afferent parts of the yde. Por valuing the firms, the generalized Valuation and the constant growth equations are combined to wrive at the nonconstant growth valuation equation P- CH Hasically, this eration calculates the present value of avidends received during the nonconstant growth period and the present Value of the stock's horson Value, which is the value at the horizon date of all dividendspected there. Quantitative Problem 3: Astume today is December 31, 2015. Imagine Works Inc. just paid a dividend of $1.25 per share at the end of 2013. The dividend is expected to grow at 10 per year for years, after which time ispected to grow at a costant rate of 5.5% annually. The company cost of equity is 10%. Using the dividend growth model (wing for noncontant growth, what should be the price of the company's stook today (December 31, 2013? Do not round intermediate calculations. Round your answer to the nearest cent