A stock’s next dividend is expected to be $0.9.

A stock’s next dividend is expected to be $0.9.

Subject: Business    / Finance
Question
Question 1

A stock’s next dividend is expected to be $0.9. The required rate of return on stock is 11.3%, and the expected constant growth rate is 7.6%. What is the stock’s current price?

a.    19.28

b.    24.32

c.    8.28

d.    23.67

Question 2

A stock is expected to pay a dividend of $0.5 at the end of the year. The required rate of return is rs = 9.6%, and the expected constant growth rate is g = 6.1%. What is the stock’s current price?

a.    4.98

b.    6.92

c.    11.59

d.    14.29

Question 3

If last dividend = $4.6, g = 3.8%, and P0 = $77.3, what is the stock’s expected total return for the coming year?

a.    9.98

b.    5.38

c.    7.37

d.    4.84

Question 4

The common stock of Connor, Inc., is selling for $25 a share and has a dividend yield of 4 percent. What is the dividend amount?

a.    7

b.    2

c.    3

d.    1

Question 5

A stock just paid a dividend of $1.7. The required rate of return is 9.6%, and the constant growth rate is 4.8%. What is the current stock price?

a.    37.12

b.    64.24

c.    23.96

d.    15.98

Question 6

The common stock of Wetmore Industries is valued at $60.8 a share. The company increases their dividend by 3.4 percent annually and expects their next dividend to be $4.1. What is the required rate of return on this stock?

a.    5.91

b.    8.46

c.    10.14

d.    15.82

Question 7

ABC’s last dividend was $3.4. The dividend growth rate is expected to be constant at 27% for 3 years, after which dividends are expected to grow at a rate of 7% forever. If the firm’s required return (rs) is 16%, what is its current stock price (i.e. solve for Po)?

a.    47.97

b.    65.31

c.    37.85

d.    48.91

Question 8

ABC’s stock has a required rate of return of 17.2%, and it sells for $34 per share. The dividend is expected to grow at a constant rate of 7.2% per year. What is the expected year-end dividend, D1?

a.    1.78

b.    2.74

c.    3.94

d.    3.40

Question 9

A stock just paid a dividend of D0 = $1.1. The required rate of return is rs = 9.2%, and the constant growth rate is g = 6%. What is the current stock price?

a.    36.44

b.    18.3

c.    10.89

d.    9.16

Question 10

ABC just paid a dividend of D0 = $0.6. Analysts expect the company’s dividend to grow by 34% this year, by 24% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 15%. What is the best estimate of the stock’s current market value?

a.    16.86

b.    11.54

c.    9.87

d.    8.35