If you use the growing dividend method of valuation, what should the stock price be as of 2006? Use a discount rate of 8% and a beta of 1.8. For the growth rate, use the chart in exhibit 4 to calculate your figure. Exhibit 4 Stock Prices, Dividends and Selected Financial DataStock Prices:Fourth QuarterThird QuarterSecond QuarterFirst Quarter200120022003200420052006$27.16$31.29$32.59$34.37$38.32$44.11$27.90$30.41$29.42$35.78$40.29$39.75$28.33$27.80$32.45$36.98$37.52$46.32$24.13$26.85$31.57$31.28$34.58$38.81Dividends Per Share:Fourth QuarterThird QuarterSecond QuarterFirst Quarter$0.28$0.29$0.30$0.31$0.34$0.36$0.28$0.29$0.29$0.31$0.34$0.36$0.28$0.29$0.29$0.31$0.34$0.36$0.28$0.29$0.29$0.31$0.34$0.36$1.46Annual Dividend$1.11$1.14$1.17$1.24$1.35Selected Financial Data:Net income ($ in millions)Shares Outstanding11,44815,3032,04911,8482,03510,4962,05519,8932,94518,7012,9512,025EPS7.475.655.825.116.756.34Payout Ratio14.8%20.2%19.9%24.2%20.0%23.0%DPS1.111.141.161.241.351.46Note: Results have not been adjusted for a divestiture at the end of 2001 and an acquisition at the beginning of 2005.

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Description: If you use the growing dividend method of valuation, what should the stock price be as of 2006? Use a discount rate of 8% and a beta of 1.8. For the growth rate, use the chart in exhibit 4 to calculate your figure. Exhibit 4 Stock Prices, Dividends

Dividend disocunt model estimates the value of the firm by discounting all its expected future…

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If you use the growing dividend method of valuation, what should the stock price be as of 2006? Use a discount rate of 8% and a beta of 1.8. For the growth rate, use the chart in exhibit 4 to calculate your figure.

If you use the growing dividend method of valuation, what should the stock price be as of 2006? Use a discount rate of 8% and a beta of 1.8. For the growth rate, use the chart in exhibit 4 to calculate your figure.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.5.2MBA: Financial leverage Costco Wholesale Corporation (COST) and Wel-Mart Stroes Inc. (WMT)reported the...

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