Module 4 discussion Problem set 1 Suppose the company is expected to pay a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years? Suppose the company just paid a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years? ABC’s stock is currently selling for $60 per share. The firm is expected to pay a dividend of $3.60. If the cost of equity is 9% compute the growth rate. Problem set 2 Suppose the company just paid dividend of $1. The dividends are expected to grow at 20% in Year 1 and 15% in Year 2. After that the dividends will grow at a constant rate of 5% forever. If the required rate of return is 10% compute today’s price of the stock. Suppose the company just paid dividend of $1. The dividends are expected to grow at 25% in Year 1 and 20% in Year 2 and 15% in Year 3. After that the dividends will grow at a constant rate of 5% forever. If the required rate of return is 10% compute today’s price of the stock. Suppose the company will not pay any dividends in Years 1 and 2. Suppose that the company pays dividend of $1 in Year 3 and after that the dividends will grow at 20% for the next two years. After that the dividends will grow at a constant rate of 5% forever. If the required rate of return is 10% compute today’s price of the stock. Problem set 3 ABC Industries will pay a dividend of $2 next year on their common stock. The company predicts that the dividend will increase by 5% each year indefinitely. What is the dividend yield if the stock is selling for $50 a share? What is the required rate of return? The dividends are expected to grow at 7% per year in the future. ABC’s common stock sells for $23 per share and its last dividend was $2. What is the cost of equity? What is the dividend yield?
nsu fin5130 module 4 discussion latest 2017 october
by | Sep 6, 2025 | Statistics
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