9. (RWJ, exercise 5.19) Whizzkids Inc., is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 18% during the next two years, 15% in the third year, and at a constant rate of 6% thereafter. Whizzkids' last dividend, which has just been paid, was $1.15. If the required rate of return on the stock is 12%, what is the price of the stock today?
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- Mobray Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 7 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $88 per share. What is the projected dividend for the coming year? (i.e. Div 1) in step 3 how did u get the 30.546 =Do (1.11607+1.24562+1.39020+1.42743+ 30.546) = 88=Do (35.72525) = 88=Do =88/ 35.72525=Do =2.46a). Tin-Tin Waste Management, Inc., is growing rapidly. Dividends are expected to grow at rates of 30 percent, 35 percent, 25 percent, and 18 percent over the next four years. Thereafter, management expects dividends to grow at a constant rate of 7 percent. The stock is currently selling at $48.83, and the required rate of return is 15.5 percent. Compute the dividend for the current year (D0). (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) Dividend $ ___________________ b).Tre-Bien, Inc., is a fast-growing technology company. Management projects rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, a constant-growth rate of 8 percent is expected. The firm expects to pay its first dividend of $2.44 a year from now. If dividends will grow at the same rate as the firm and the required rate of return on stocks with similar risk is 22 percent, what is the current value…YZ Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 17% during the next 2 years, at 15% the following year, and at a constant rate of 7% during Year 4 and thereafter. Its last dividend was $1.55, and its required rate of return is 12%. a. Calculate the value of the stock today. b. Calculate P1 and P2 (Prices for Year 1 and Year 2). c. Calculate the dividend and capital gains yields for Years 1, 2, and 3.
- Turbo Technology Computers is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next two years, at 13% in the third year, and at a constant rate of 6% thereafter. Turbo's last dividend was $1.15, and the required rate of return on the stock is 12%. Complete the following calculations: a.Calculate the value of the stock today. b. Calculate P1^ and P2^. c. Calculate the dividend yield and capital gains yield for Years 1, 2, and 3. 2. Kassidy's Kabob House has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $50 a share. What is the stock's required rate of return? Assume the market is in equilibrium with the required return equal to the expected return. 3. McCaffrey's Inc. has never paid a dividend, and when the firm might begin paying dividends is not known. Its current free cash flow (FCF) is $100,000, and this FCF is expected to grow at a constant 7% rate. The…Ewald Company is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 11% during the next 2 years, at 9% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $2.15, and its required rate of return is 14%.A. Calculate the value of the stock today. B. Calculate the dividend and capital gains yields for Years 1, 2, and 3. What is the impact on the stock price if g falls to 4% or rises to 6%? *Whizzkids, Inc., is experiencing a period of rapid growth. Earnings anddividends per share are expected to grow at a rate of 18 percent duringthe next two years, 15 percent in the third year, and at a constant rate of6 percent thereafter. Whizzkids’ last dividend, which has just been paid,was $1.15. If the required rate of return on the stock is 12 percent, whatis the price of a share of the stock today?
- 2. Intel just paid an annual dividend of $2 a share. Management estimates the dividend will increase by 10 percent a year for the next two years. After that, the dividend growth rate is estimated at 5 percent. The required rate of return is 12 percent. What is the value of this stock today?Mobray Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 7 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $88 per share. What is the projected dividend for the coming year? (i.e. Div 1)Saga TechInc. just paid a dividend of $4.00 per share (that is, DO=4.00) The dividends of SagaTech are expected to grow at a rate of 20 percent next year (that is, g1=.20) and at a rate of 10 percent the following year ( that is, g2=.10) Thereafter ( i.e., from year 3 to infinity) the growth rate in dividends is expected to be 5 percent per year. Assuming the required rate of return on Saga Tech, Inc. stock is 9 percent compute the current price of the stock . Record your answer as a dollar amount rounded to 2 decimal places , but do not include a dollar sign or any commas in your answer . For example , record $ 18,124.24985 as 18124.25 . Your Answer :
- (b) Assume that Stock X is fairly priced today. Stock X just distributed a per share dividend of$1. It is expected that the company will increase its dividend by 20% in the coming year, 15%in the second year, 10% in the third year, and 5% in the fourth year. Starting from the fifthyear, the company will maintain the dividend growth rate to be 5% per year forever. Howmuch is Stock X worth today if its equity cost of capital is 10%?Shell is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $1.15, and its required rate of return is 12%. d) Calculate the value of the stock one year from today.Synovec Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 5 percent per year, indefinitely. The required return on this stock is 10 percent and the stock currently sells for $98 per share. What is the projected dividend for the coming year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
