Finance 2
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 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 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 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 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 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 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 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....