WSUFIN Inc. does not expect to grow in the next several years. Its last annual dividend was $3.57 Ifthe required rate of return on similar investments is 7 percent, how much should we pay for thestock today? (Round the answer to two decimal places.)$39.66$35.42$32.14$51.00none of these

Given information: Annual Dividend (D) = $3.57 Required return (Re) = 7% or 0.07 Required: Value of…

Answered: WSUFIN Inc. does not expect to grow in…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

ABC Inc. does not expect to grow in the next several years. its last annual dividend was $3.57 if the required rate of return on similar investments is 7 percent, how much should we pay for the stock today? round answer to two decimal places
Global Logistics just announced it is increasing its annual dividend to $1.46 next year and will increase that dividend by 2.11 percent annually thereafter. How much will one share of this stock be worth ten years from now if the required rate of return is 13.1 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Lauren Corporation will pay a dividend of $2.90 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever. a. If you want a return of 18 percent, How much will you pay for the stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. If you want a return of 9 percent, How much will you pay for the stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Stock price b. Stock price
A company pays a constant $8.25 dividend on its stock. The company will maintain this dividend for the next 13 years and will then cease paying dividends forever. If the required return on this stock is 11.2 percent, what is the current share price? (Hint: this is a present value problem for annuity cash flows.) Please use a HP 10bii+ Financial Calculator
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If the last dividend paid by Chemical Brothers Inc. was $1.25 and analysts expect these payments to increase 4% per year, what will the stock price be next year if the required return is 15%? Select one: O a. $12.29 O b. $11.82 O c. $31.25 O d. $12.78 O e. $23.11
Cape Corp. will pay a dividend of $3.50 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever. a. If you want a return of 16 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you want a return of 9 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Fowler, Inc., just paid a dividend of $2.70 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. Assume investors require a return of 9 percent on this stock a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in six years and in thirteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Current price Price in six years Price in thirteen years
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Fowler, Inc., just paid a dividend of $2.75 per share on its stock. The dividends are expected to grow at a constant rate of 6.5 percent per year, indefinitely. Assume investors require a return of 11 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in three years and in fifteen years?

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WSUFIN Inc. does not expect to grow in the next several years. Its last annual dividend was $3.57 If the required rate of return on similar investments is 7 percent, how much should we pay for the stock today? (Round the answer to two decimal places.) $39.66 $35.42 $32.14 $51.00 none of these