Question
Weston Corporation just paid a dividend of $1.00 a share (i.e.,D0 = $1.00). Assume Weston has a constant ROE of 10% and it pays out
Weston Corporation just paid a dividend of $1.00 a share (i.e.,D0 = $1.00). Assume Weston has a constant ROE of 10% and it pays out 40% of net income every year. a. What would the growth rate be? b. What is the expected dividend per share for each of the next 3 years? c. How much is the current price if the require rate of return is 12%? d. What is the dividend yield for the first year if the current market price is $15? e. Should you buy the Weston Corporation stock based on your calculations? 2. Tresnan Brothers is expected to pay a $1.80 per share dividend at the end of the year (i.e., 1 = $1.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs , is 10%. What is the stocks current value per share? FIN3310-04 Assignment 10 Prof. Bo Wang 2 3. Carnes Cosmetics Co. recently paid a $1.00 dividend. This dividend is expected to grow by 30% for the next 3 years, then grow forever at a constant rate, g = 2.25%. If the market required rate of return is 9%, what is your estimation of its current stock price? step by step without using excel
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