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- (b) Suppose Zoomless Co. is expected to increase dividends by 25% in year one and by 20% in year two. After that, dividends will increase at a rate of 8% per year indefinitely. If the last dividend (just paid) was $15 and the required return is 18%, Calculate the price of the Zoomless Co.29. Nonconstant Growth. Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another three years. (L07-2) a. If the last dividend paid was $2, what will the next dividend be? b. If the discount rate is 15% and the steady growth rate after three years is 4%, what should the stock price be today? n Pap 229Nonconstant Growth. Tattletale News Corp. has been growing at a rate of 20% per year, andyou expect this growth rate in earnings and dividends to continue for another 3 years. (LO7-2)a. If the last dividend paid was $2, what will the next dividend be?b. If the discount rate is 15% and the steady growth rate after 3 years is 4%, what should thestock price be today?
- Trend-Line Inc. has been growing at a rate of 6% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $8 per share. a. If the market expects a 10% rate of return on Trend-Line, at what price must it be selling? (Do not round intermediate calculations.) Current selling priceFranklin Corporation is expected to pay a dividend of $1.24 per share at the end of the year (D1 = $1.24). The stock sells for $32.40 per share, and its required rate of return is 7.2%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.29. Nonconstant Growth. Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. (LO7-2) a. If the last dividend paid was $2, what will the next dividend be? b. If the discount rate is 15% and the steady growth rate after 3 years is 4%, what should the stock price be today?
- A firm is expected to grow at a rate of 5% per year in the next two years and slows down to 3% per year thereafter. If the firm just paid a dividend of $2 a share, what is the stock price at t=0 given a required rate of return at 10%? (Do not round intermediate calculations, round to two decimals in your final answers.) Oa. $29.76 Ob. $22.86 Oc. $31.07 O d. $30.55Trend-Line Inc. has been growing at a rate of 6% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $8 per share. a. If the market expects a 10% rate of return on Trend-Line, at what price must it be selling i.e. Current selling price?Genentech is expecting both earnings and dividends to grow by 15% in Year 1, 0% in Year 2, by 5% in Year 3, and at a constant rate of 10 percent in Year 4 and thereafter. The required return on Genentech is 15 percent, and it sells at its equilibrium current price $288. What is the approximate value of its expected dividend in Year 1, D1? Please show work on EXCEL!!! A) $0 B) $1.25 C) $1.75 D) $2.05 E) $2.85
- 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?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?Company A is a worldwide delivery company that is expected to generate a dividend (per share) of $1.40 one year from now (i.e. at t=1). You are expecting that on average Company A's dividends will grow at 5% each year after that into the indefinite future. Assume for simplicity that all dividends are paid at the end of each year. Suppose that the appropriate discount rate for these dividends is 10%. a. What is the current stock price for Company A? Assume that any dividend at t=0 has already been paid out. b. What do you expect the stock price of Company A to be next year (i.e. at t=1) immediately after the dividend has been paid out? c. What is the expected return for holding the stock of Company A over the year ahead? Hint: Find the IRR on the expected cash flows from buying and holding the stock for one year. The cash flows should include the purchase and sale of the stock as well as the dividend you will receive