4. You are considering to purchase of Ohha, Inc. Stocks.The firm has just paid a dividend of P5.50 per share. Thestock is selling for P125 per share. Top management isprojecting a steady growth of 10% in dividends and earningsover the foreseable future. Your required rate of return forstock of this kind is 18%. If you were to purchase and holdthe stock for 3 years, What would be the expected dividendsworth today.

The value of expected dividends is found out by discounting the present value of dividends of all…

Answered: 4. You are considering to purchase of…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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You are considering to purchase of Ohha, Inc. Stocks. The firm has just paid a dividend of P5.50 per share. The stock is selling for P125 per share. Top management is projecting a steady growth of 10% in dividends and earnings over the foreseable future. Your required rate of return for stock of this kind ia 18%. If you were to purchase and hold the stock for 3 years, What would be the expected dividends worth today.
You have just purchased a share of stock for $20.29.The company is expected to pay a dividend of $0.52 per share in exactly one year. If you want to earn a 9.1% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend? The price one year from now should be $_______.(Round to the nearest cent.)
You are considering the purchase of Yudee Ha, Inc. The firm just paid a dividend of P4.85 per share. The stock is selling for P135 per share. Security analyst agrees with top management in projecting steady growth of 11% in dividends and earnings ovewr the foreseeable future. Your required rate of return for stock of this type is 17.5%. If you were to purchase and hold the stock for three years, what would the expected dividends be worth today? 2. Divergent, Inc. has a weighted average cost of capital of 11.5%. Its target capital structure is 55% equity and 45% debt. The company has sufficient retained earnings to fund the equity portion of its capital budget. The before-tax cost of debt is 9% and the company tax rate is 30%. If the expected dividend next period is P5 and the current stock price is P45, what is the company’s growth rate? Answer 1 and 2 with solution
You have just purchased a share of stock for $18.85. The company is expected to pay a dividend of $0.71 per share in exactly one year. If you want to earn a 9.1% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend? The price one year from now should be $. (Round to the nearest cent.) C
You have just purchased a share of stock for $ 21.41. The company is expected to pay a dividend of $0.72 per share in exactly one year. If you want to earn a 9.4% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend? The price one year from now should be $________? (Round to nearest cent)
You have just purchased a share of stock for $21.34. The company is expected to pay a dividend of $0.54 per share in exactly one year. If you want to earn a 9.4% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend? The price one year from now should be $ (Round to the nearest cent.)
3. You are considering the purchase of Jillex Company stock. You anticipate that the company will pay dividend of P2.25 per share next year and P2.50 per share the following year. You believe that you can sell the stock for P18.50 per share two years from now. If your required rate of return is 12.5%, what is the maximum price you would pay for a share?
Please use Excel to solve: You have just purchased a share of stock for $20. The company is expected to pay a dividend of $0.50 per share in exactly one year. If you want to earn a 10% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend?
8. You are considering the purchase of Yule Ha, Inc. The firm just paid a dividend of P4.85 per share. The stock is selling for P135 per share. Security analyst agrees with top management in projecting steady growth of 11% in dividends and earnings over the foreseeable future. Your required rate of return for stock of this type is 17.5%. If you were to purchase and hold the stock for three years, what would the expected dividends be worth today?
You are evaluating the stock of XYZ Corp. Suppose that the required rate of return for the firm is 20%. Suppose future dividends are expected to grow at 10% per year. The current stock price of the firm is $55. What is the expected dividend per share next year (D1)? a. $4.5 b. $4.0 c. $5.0 d. $5.5
You are considering the purchase of Ahlecs Company stock. You anticipate that the company will pay dividend of P2.25 per share next year and P2.50 per share the followiing year. You believe that you can sell the stock for P18.50 per share two years from now. If your required rate of return is 12.5%, what is the maximum price that would pay for a share?
You are considering purchasing a stock that is expected to pay a dividend of $5 at the end of the year. The dividends for this firm are expected to grow at a constant rate of 5%. Based on the riskiness of the stock, you require a return of 9%. If you pay $73 for this stock today, what is your expected return?

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