Share B is not expected to pay a dividend in the next five years. Starting from year 6, it is expected to pay a constant dividend of $2.50 per year. What is the value of Share B if your required return is 8% per year.
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- Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32. If you require an annual rate of return of 12 percent, what must be the amount of the annual dividend which you expect to receive at the end of Year 1?How much would you be prepared to pay for a share in 2 years’ time that pays a $1.5 dividend each year constantly ? Assume the required rate of return is expected to remain constant at 9.1% per year.Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. a) What would be the likely stock price in year 5? b) What would be per annum rate of return implied by a change in prices from time 0 to time 5?
- A stock will pay a dividend next quarter of $1.00. If the expected return is 10% per year, compounded annually, what is the price of the stock? Suppose a stock will pay $0 for the next 4 years, and then pay $1 every quarter after that. The required return is 10% per year, compounded annually. What is the price of the stock? Suppose a stock will pay $0.50, $1.00, $1.50, $2.00 and then grow at 4% per year compounded quarterly. The required return is 10% per year compounded annually. What is the price of the stock?What would be the price of a stock that pays an annual fixed dividend of $1.2 for ten years, and then the dividend payment increases by 1% every year, and the required rate of return is 5% annually?Suppose the current dividends on a stock are $4.7 per share and dividends are expected to increase by 3% per year, forever. If the required rate of return is 7%, what is the value of thestock?
- How much would you be prepared to pay for a share in two years' time when it begins to pay a $0.17 dividend each year and is currently priced at $3? Assume the required rate of return is 8.5% p.a.Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. i) Compute the current stock price for Whizcom Inc.ii) What would be the likely stock price in year 5?iii) What would be per annum rate of return implied by a change in prices from time 0 to time 5?A company's next dividend is USD6.5 which is expected to remain stable in the coming years, till perpetuity. Your required rate of return is 16%. a. How much will you offer to buy this stock at? b. If the dividends will grow at a rate of 4% per year, what will be the dividend that the company will distribute in year 16? C. If the dividends will grow at a rate of 2%, what will be the price of the stock in year 9?
- A share is expected to pay an annual dividend of $1.93 next year, and this dividend is then expected to grow at a constant rate of 3% p.a. in perpetuity. If the required rate of return is 8% p.a., what is the value of the share?b) Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32. If you require an annual rate of return of 12 percent, what must be the amount of the annual dividend which you expect to receive at the end of Year 1?What is the current value of a share of McDonalds if its current dividend is $1.50 and dividends are expected to grow at an annual rate of 20 percent for the next 5 years? Assume the investor has a required rate of return of 15 percent and expects to sell the security in 5 years for $72.