question 1

a. The common stock of Salazar Insurance currently pays a constant annual dividend of $5.10 per share. What is one share of this stock worth at a discount rate of 13 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, 6.9. 32.16.) b. Salazar Insurance decides to change their dividend policy and are expected to increase dividends by 4.3 percent annually . What is the price of one share of this stock at the required rate of return of 13 percent? Assume the last dividend paid is $5:10. (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Under this new dividend policy, what are the dividend yield and the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. Unlike Salazar Insurance, Altitude Group does not pay dividends. However, this company has earnings per share of $5,80 and the benchmark PE Is 12 times. What stock price would you consider appropriate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price b. New stock price c. Dividend yield Capital gains yield d. Stock price at PE of 12 le