Finance- ABC Company's last dividend was $0.7.

Question 1

1. ABC Company's last dividend was $0.7. The dividend growth rate is expected to be constant at 30% for 2 years, after which dividends are expected to grow at a rate of 6% forever. The firm's required return (r_s) is 16%. 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 2

1. The common stock of Wetmore Industries is valued at $59.8 a share. The company increases their dividend by 6.7 percent annually and expects their next dividend to be $0.6. 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 3

1. ABC just paid a dividend of D₀ = $4.3. Analysts expect the company's dividend to grow by 30% this year, by 22% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 14%. 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 4

1. ABC's last dividend was $5.4. The dividend growth rate is expected to be constant at 25% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (r_s) 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 5

1. ABC Enterprises' stock is currently selling for $92.9 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 6

1. If D₁ = $3.1, g (which is constant) = 2.5%, and P₀ = $70.1, 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 7

1. If D₁ = $5.24, g (which is constant) = 2%, and P₀ = $51.83, 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 8

1. ABC is expected to pay a dividend of $2.7 per share at the end of the year. The stock sells for $116 per share, and its required rate of return is 14.2%. 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.

1 points

Question 9

1. A stock is expected to pay a dividend of $2.4 at the end of the year. The required rate of return is r_s = 11.4%, and the expected constant growth rate is g = 7.5%. 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 10

1. If last dividend = $5.5, g = 6.9%, and P₀ = $66.1, 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 11

1. ABC's stock has a required rate of return of 13%, and it sells for $51 per share. The dividend is expected to grow at a constant rate of 4.8% 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 12

1. ABC Inc., is expected to pay an annual dividend of $4.1 per share next year. The required return is 15.9 percent and the growth rate is 3.4 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 13

1. A stock just paid a dividend of D₀ = $1.3. The required rate of return is r_s = 14.2%, and the constant growth rate is g = 5.1%. 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 14

1. ABC’s last dividend paid was $0.3, its required return is 15%, its growth rate is 3.2%, 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 15

1. ABC Enterprises' stock is expected to pay a dividend of $1.8 per share. The dividend is projected to increase at a constant rate of 6.9% per year. The required rate of return on the stock is 16.2%. 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 16

The common stock of Connor, Inc., is selling for $31 a share and has a dividend yield of 2.2 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.