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Finance Problems Set -1

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Question;Question 1ABC is expected to pay a dividend of $4.5 per share at the end of the year. The stock sells for $93 per share, and its required rate of return is 10.9%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.1 pointsQuestion 2ABC Inc., is expected to pay an annual dividend of $1 per share next year. The required return is 17.7 percent and the growth rate is 6.7 percent. What is the expected value of this stock five years from now?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 3The common stock of Connor, Inc., is selling for $42 a share and has a dividend yield of 2.8 percent. What is the dividend amount?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 4ABC?s last dividend paid was $1, its required return is 12.6%, its growth rate is 7.8%, and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is P7?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 5The common stock of Wetmore Industries is valued at $37.8 a share. The company increases their dividend by 4.7 percent annually and expects their next dividend to be $2. What is the required rate of return on this stock?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.1 pointsQuestion 6ABC Enterprises' stock is expected to pay a dividend of $0.2 per share. The dividend is projected to increase at a constant rate of 4.2% per year. The required rate of return on the stock is 19.9%. What is the stock's expected price 3 years from today (i.e. solve for P3)?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 7A stock just paid a dividend of D0 = $1.8. The required rate of return is rs = 13.7%, and the constant growth rate is g = 3.4%. What is the current stock price?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 8ABC's last dividend was $2.2. The dividend growth rate is expected to be constant at 21% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 14%, what is its current stock price (i.e. solve for Po)?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 9A stock is expected to pay a dividend of $1.8 at the end of the year. The required rate of return is rs = 11.7%, and the expected constant growth rate is g = 6.9%. What is the stock's current price?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 10ABC's stock has a required rate of return of 13%, and it sells for $74 per share. The dividend is expected to grow at a constant rate of 4.7% per year. What is the expected year-end dividend, D1?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 11A stock's next dividend is expected to be $1.4. The required rate of return on stock is 17.7%, and the expected constant growth rate is 3.9%. What is the stock's current price?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 12ABC just paid a dividend of D0 = $2.8. Analysts expect the company's dividend to grow by 32% this year, by 24% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 13%. What is the best estimate of the stock?s current market value?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 13A stock just paid a dividend of $0.9. The required rate of return is 19.3%, and the constant growth rate is 4.3%. What is the current stock price?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 14If D1 = $3.57, g (which is constant) = 2%, and P0 = $91.63, what is the stock?s expected dividend yield for the coming year?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.1 pointsQuestion 15If last dividend = $6.8, g = 7.3%, and P0 = $77.7, what is the stock?s expected total return for the coming year?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.1 pointsQuestion 16ABC Company's last dividend was $4.3. The dividend growth rate is expected to be constant at 30% for 2 years, after which dividends are expected to grow at a rate of 7% forever. The firm's required return (rs) is 13%. What is its current stock price (i.e. solve for Po)?Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.1 pointsQuestion 17If D1 = $3.2, g (which is constant) = 2.6%, and P0 = $60.1, what is the stock?s expected total return for the coming year?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.1 pointsQuestion 18ABC Enterprises' stock is currently selling for $36.8 per share. The dividend is projected to increase at a constant rate of 7.9% per year. The required rate of return on the stock is 12%. What is the stock's expected price 5 years from today (i.e. solve for P5)?Note: Enter your answer rounded off to two decimalbox.

 

Paper#48903 | Written in 18-Jul-2015

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