ABC’s stock has a required rate of return of 19%, and it sells

ABC’s stock has a required rate of return of 19%, and it sells

Subject: Business    / Finance
Question
QUESTION 1

ABC’s stock has a required rate of return of 19%, and it sells for $67 per share. The dividend is expected to grow at a constant rate of 7.5% per year. What is the expected year-end dividend, D1?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 2

ABC Enterprises’ stock is expected to pay a dividend of $1.9 per share. The dividend is projected to increase at a constant rate of 5.2% per year. The required rate of return on the stock is 17.6%. What is the stock’s expected price 3 years from today (i.e. solve for P3)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 3

If last dividend = $3.1, g = 3.4%, and P0 = $67.7, what is the stock’s expected total return for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 4

A stock is expected to pay a dividend of $2 at the end of the year. The required rate of return is rs = 18.6%, and the expected constant growth rate is g = 6.9%. What is the stock’s current price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 5

ABC’s last dividend paid was $1.7, its required return is 18.9%, its growth rate is 3.7%, and its growth rate is expected to be constant in the future. What is Sorenson’s expected stock price in 7 years, i.e., what is P7?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 6

ABC just paid a dividend of D0 = $2.7. Analysts expect the company’s dividend to grow by 32% this year, by 20% in Year 2, and at a constant rate of 6% in Year 3 and thereafter. The required return on this stock is 9%. What is the best estimate of the stock’s current market value?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 7

If D1 = $3.2, g (which is constant) = 2.6%, and P0 = $60.1, what is the stock’s expected total return for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 8

The common stock of Wetmore Industries is valued at $53.8 a share. The company increases their dividend by 4.8 percent annually and expects their next dividend to be $4.7. What is the required rate of return on this stock?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 9

ABC Inc., is expected to pay an annual dividend of $3.7 per share next year. The required return is 16.4 percent and the growth rate is 3.5 percent. What is the expected value of this stock five years from now?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 10

ABC’s last dividend was $4.5. The dividend growth rate is expected to be constant at 33% for 3 years, after which dividends are expected to grow at a rate of 7% forever. If the firm’s required return (rs) is 17%, what is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 11

A stock just paid a dividend of D0 = $1.9. The required rate of return is rs = 10.1%, and the constant growth rate is g = 6.5%. What is the current stock price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 12

The common stock of Connor, Inc., is selling for $36 a share and has a dividend yield of 4.9 percent. What is the dividend amount?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 13

If D1 = $3.5, g (which is constant) = 2%, and P0 = $88.47, what is the stock’s expected dividend yield for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 14

ABC Company’s last dividend was $1.8. The dividend growth rate is expected to be constant at 34% for 2 years, after which dividends are expected to grow at a rate of 6% forever. The firm’s required return (rs) is 17%. What is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 15

ABC Enterprises’ stock is currently selling for $72.1 per share. The dividend is projected to increase at a constant rate of 5.6% per year. The required rate of return on the stock is 12%. What is the stock’s expected price 5 years from today (i.e. solve for P5)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 16

ABC is expected to pay a dividend of $1.5 per share at the end of the year. The stock sells for $145 per share, and its required rate of return is 10.6%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.