Pharmecology just paid an annual dividend of $1.50 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 3.50% per year. The nominal cost of capital is 10.25%. a. What is Pharmecology's current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price b. What would be Pharmecology's current stock price using forecasted real dividends and a real discount rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price
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- 'S A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 14%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected priceLargan Co has a preterted stock outstanding with a par value of $100 and its dividend is $1 per quarter. The current stock price is $120. 1A.What is its nominal required rate of return per annual? 1B. What is the effective rate of return? show solutionYou want to calculate the weighted average cost of capital. The dividend just paid is $2.50/share. It is anticipated to grow at a rate of 5% for the foreseeable future. What is the cost of equity if the current price of stock is $44.30 a share? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.) Cost of equity %
- Company Z-prime's earnings and dividends per share are expected to grow by 3% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year's dividend is $3, the market capitalization rate is 11% and next year's EPS is $10. What is Z-prime's stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price $The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D₁) at the end of the current year will be $1.40. The growth rate (g) is 10 percent and the discount rate () is 14 percent. a. What should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Price of the stock b. If there is a 5 percent total underwriting spread on the stock, how much will the issuing corporation receive? (Do not round intermediate calculations and round your answer to 2 decimal places.) Net price to the corporation c. If the issuing corporation requires a net price of $33.50 (proceeds to the corporation) and there is a 5 percent underwriting spread, what should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Necessary public priceNachman Industries just paid a dividend of Do = $1.50. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 4% in Year 3 and thereafter. The required return on this low-risk stock is 7.00%. What is the best estimate of the stock's current market value? Do not round intermediate calculations. a. $52.41 b. $70.14 c. $64.40 d. $68.64 e. $66.15
- Company Z-prime’s earnings and dividends per share are expected to grow by 4% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year’s dividend is $4, the market capitalization rate is 14% and next year’s EPS is $9. What is Z-prime’s stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $58 a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $42. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per share and sells for $44. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case? Complete this question by entering your answers in the tabs below. Required A Required B Required C Now suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.) Dividend yield Capital gains yield
- ABC Company is expected to pay $2.80 per share dividend at the end of the year (D1 = $2.80). The dividend is expected to grow at a constant rate of 5% per year. The required rate of return on the stock, rs is 9%. What is the stock’s current value per share? 2. Use the information from question 2 to calculate the following. You will need to also calculate the current stock price for year 2 in order to calculate each of these items. (hint: Use PowerPoint slide 14 as a guide): Dividend yield Capital gains yield Total return 3. ABC Company also has perpetual preferred stock outstanding that sells for $25 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return?NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40. After year 2, dividends are expected to grow at the rate of 6% per year. An appropriate required return for the stock is 9%. The stock should be worth _______ today. Select one: a. $79.63 b. $73.21 c. $67.32 d. $73.371. 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.