Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

you assig The assignment should be clearly typed on Microsoft Excel or on Microsoft Word; sloppy work will not be accepted. (Show the calculations that

image text in transcribed

you assig The assignment should be clearly typed on Microsoft Excel or on Microsoft Word; sloppy work will not be accepted. (Show the calculations that you made with the formulas) Questions: 1. The next dividend payment by Dizzle, Inc., will be $2.48 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. If the stock currently sells for $39.85 per share, what is the required return? What is the dividend yield? What is the expected capital gains yield? 2. Suppose you know that a company's stock currently sells for $67 per share and the required return on the stock is 11.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? 3. Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $3 per share and has announced that it will increase the dividend by $5 per share for each of the next four years, and then never pay another dividend. If you require a return of 10.4 percent on the company's stock, how much will you pay for a share today? 4. Antiques 'R' Us is a mature manufacturing firm. The company just paid a dividend of $16.30 but management expects to reduce the payout by 4.5 percent per year, indefinitely. If you require a return of 12 percent on this stock, what will you pay for a share today

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fixed Income Markets And Their Derivatives

Authors: Suresh Sundaresan

3rd Edition

0123850517, 978-0123704719

More Books

Students also viewed these Finance questions

Question

What is the raison-dtre behind pricing of a depositary receipt?

Answered: 1 week ago

Question

denigration of emotional outbursts; being reserved;

Answered: 1 week ago