#### Description of this paper

##### If the dividend in year 0 is $1.20 and the growth rate is 3%, then the dividend in Year 7 is

**Description**

solution

**Question**

1. If the dividend in year 0 is $1.20 and the growth rate is 3%, then the dividend in Year 7 is equal to;a. $1.20 X (1.03)5.;b. $1.20 X (1.03)6.;c. $1.20 X (1.03)7.;d. $1.20 X (1.03)8.;2. You observe a stock price of $18.75. You expect a dividend growth rate of 5% and the next expected dividend payment is $1.50. What is the required return?;a. 5.0%;b. 13.0%;c. 13.4%;d. 15.2%;3. A company is expected to pay their first annual dividend 3 years from now. That payment will be $1.50 a share. Starting in Year 4, the company will increase the dividend by 5% per year. The required return from common shareholders is 15%. What is the estimated value of this stock today?;a. $11.34;b. $13.04;c. $15.28;d. $16.50

Paper#30531 | Written in 18-Jul-2015

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