QUESTION

1. If D0 = $2.8, g = 3.2%, and P0 = $79.4, what is the required rate of return on the stock? That is, solve for r.

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION

1. ABC just paid a dividend of D0 = $4.9. Analysts expect the company's dividend to grow by 30% this year, by 22% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this stock is 12%. What is the best estimate of the stock's current market value?

2. Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION

1. ABC is expected to pay a dividend of $1.6 per share at the end of the year. The stock sells for $54 per share, and its required rate of return is 17.5%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION

1. ABC Enterprises' stock is expected to pay a dividend of $1.2 per share. The dividend is projected to increase at a constant rate of 3.2% per year. The required rate of return on the stock is 12.7%. What is the stock's expected price 3 years from today (i.e. solve for P3)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.