Question
The common stock of Dayton Repair has just paid $2.28 per share as annual dividend. The firm has a plan to increase its dividends to
The common stock of Dayton Repair has just paid $2.28 per share as annual dividend. The firm has a plan to increase its dividends to 2.508 next year, and then establish a pattern of increasing its dividends by 2.15 percent annually and expects to continue doing so. (20 points)
A) What is one share of this stock worth today at a required return of 7.43 percent?
B) Currently, the firm has an EPS of $2.54 and a benchmark PE of 18 What is the estimated current stock price using this method?
C) If the current market price of Dayton Repair is $39, what do you suggest (buy/hold/sell)?
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Arshad Ahmad, Jordan Fortino
6th Canadian edition
1259453146, 978-1259453144
