Tomorrow Investments Ltd. just paid a divided of K2.00 in 2019 and the dividend is expected to grow at 15% for the next 3years and thereafter decline to 10%. The required rate of return on the stock is 18%. Find the value of the stock.?
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- 5. Stable Ltd., all equity financed, expects this year’s earnings to be €3 per share paid out at the end of the year. Future net investments are zero. The required rate of return for Stable is 10% annually. Compute the current value of Stable, assume the date is January 1 in the current year.Assume you’ve forecasted the following Net Income amounts for Chipotle over the period 2021-2030. Assuming a beta of 1.28, a risk-free rate of 1.14% and a market risk premium of 4.72%. Assume Chipotle pays “dividends” each period equal to 5.24% of net income. The beginning book value of equity equals $2,020,135. Calculate residual income and the present value of each residual income amount. (Don’t forget to calculate book value of shareholders’ equity each period.) See attatched picture for work 2. Calculate the continuing value assuming a 3% growth rate.Step 1: Multiply Net Income for 2030 by (1+g)Step 2: Multiply Book Value of Shareholder’s Equity at end of 2030 by RE (cost of equity).Step 3: Subtract Step 2 amount from Step 1 amount. This is the continuing residual income.Step 4: Assume the Step 3 amount is a perpetuity with growth (this amount will grow forever at a constant rate). Divide the Step 3 amount by (RE-g). It will be a big number. 3. Add…Suppose today is Dec 31st 2018. The stock of Alliant Energy Corp. will pay a dividend of $0.36 every quarter in 2019. You expect its stock price will grow to $46.50 at the end of 2019. The required return on the stock is 8 percent as in APR (compounded quarterly). What should the stock price be today?
- 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?Best Corporation is expected to pay $.60 next year and $1.10 the following year and $1.25 each year thereafter. If the required return is .14, what is the priice of the stock? $7.40 $2.95 $8.24 $2.22At the beginning of 2016, you invested $20,000 in Jersey Mike's Corporation (JMC), trading at $20 per share. JMC earned a return of 14% in 2016, 20% in 2017, -8% in 2018. Assume the risk-free rate is 3% per year. You can treat this risk-free asset as an asset with a constant rate of return. What was the cumulative return from the start of 2018 to the end of 2018 if you had formed the following portfolios: A. Buy 500 shares of JMC, invest the remainder in the risk-free asset. B. Buy 2,000 shares of JMC on margin, borrowing at the risk-free rate. (Hint: When you borrow from the risk-free asset, its weight in your portfolio should be negative.) C. Short-sell 1,000 shares of JMC, invest the remainder in the risk free asset.
- 1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96. Please provide an accurte answer.Wolfwire industries is expected to pay a dividend of $3.50 next year (D₁) and has a beta of 1.5. Dividend are expected to grow at a rate of 3% into the indefinite future. The expected return on the market Rm is 12% and the risk-free rate is 4%. What is the required return on Wolfwire stock? .04 .16 .14 O.18Assume that share price of Oman Petro products is rials at the end of 2019. We atso that price-toearnings ratio of similar companies is 20. The company has a 50% Dividend payout policy (50% of earnings is paid out dividends)Earnings per share forecasted to be 0.100 Rials for end of year 2020 and is forecasted to grow by % year after . Assume required return is 10 per cent. 1. Calculate the value per share using the Dividend Discount Model ? 2.Do you recommend a “Buy “ or “Sell “using the DDM method?
- Google will pay its dividends of S5 in 2020 and $6 in 2021. It plans to pay a constant dividend of S7 from 2022 permanently. DGiven the required return of 20 percent, what is the stock price of Year 2021? You don't have to calculate the dividend growth rate. Please use the current dividend informationAssume the risk-free rate is 2.5% and the market risk premium is 8.0%. The beta of GE is 1.10. The dividend forecast for the next four years is as follows: 2017: $1.04 2018: $1.22 2019: $1.41 2020: $1.60 Using the dividend payout ratio (53%) and Return on Equity (19.5%), what is closest to the intrinsic value of GE stock using the dividend discount model? Question 9 options: a) $53.40 b) $140.00 c) $97.98 d) $75.83Yharnam Co. is expected to pay a dividend of D1 = $1.40 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5.00% per year in the future. The company's beta is 1.2, the Market Risk Premium is 6.25%, and the risk-free rate is 3.90%. What is the company's current stock price? Group of answer choices 24.06 18.59 28.00 22.40 21.88
