Question
rioles Company pays its dividends once per year. The Orioles Company's last dividend (paid yesterday) was $1.20. Its dividends are expected to grow each year
rioles Company pays its dividends once per year. The Orioles Company's last dividend (paid yesterday) was $1.20. Its dividends are expected to grow each year at 18% for three (3) years, after which dividends are expected to grow at a rate of four percent (4%) forever. Its required return is 12%. a. What is the best estimate of the current stock price of Orioles Company? b. What is the capital gains yield in year 4? c. What is the dividend yield in year 4? d. Pretend today is January 2, 2024. Baltimore Company has a share price of $25 today; If Baltimore Company is expected to pay a dividend of $.75 per share at the end of the year and if Baltimore Company's stock price is expected to grow to $26.75 at the end of the year, What is the equity cost of capital of Baltimore Company?
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