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##### Week 6 homework

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Question;Top of Form;Question;1;If D1 = $4.7, g (which is constant) = 3.7%, and P0 =;$73.6, 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 points;Question 2;The common stock of Wetmore Industries is;valued at $40.6 a share. The company increases their dividend by 7.8 percent;annually and expects their next dividend to be $5.6. 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 points;Question 3;A stock is expected to pay a dividend of $2.4 at the end of the year. The;required rate of return is rs = 11.4%, and the expected constant;growth rate is g = 7.5%. 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 points;Question 4;If D1 = $5.41, g (which is constant) = 2%, and P0 = $93.26;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 points;Question 5;ABC just paid a dividend of D0 =;$4.3. Analysts expect the company's dividend to grow by 30% this year, by 22%;in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required;return on this stock is 14%. 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 points;Question 6;A stock just paid a dividend of $2.3. The;required rate of return is 9.2%, and the constant growth rate is 7.2%. 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 points;Question 7;ABC Company's last dividend was $3.7. The;dividend growth rate is expected to be constant at 28% for 2 years, after which;dividends are expected to grow at a rate of 6% forever. The firm's required;return (rs) is 12%. 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 points;Question 8;ABC is expected to pay a dividend of $1.4 per;share at the end of the year. The stock;sells for $109 per share, and its required rate of return is 18.3%. 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 points;Question 9;ABC Enterprises' stock is expected to pay a;dividend of $1.8 per share. The dividend is projected to increase at a constant;rate of 6.9% per year. The required rate of return on the stock is 16.2%. 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 points;Question 10;A stock's next dividend is expected to be;$1.1. The required rate of return on stock is 10.6%, and the expected constant;growth rate is 2.2%. 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 points;Question 11;ABC's stock has a required rate of return of;18.7%, and it sells for $36 per share. The dividend is expected to grow at a;constant rate of 5.5% 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 points;Question 12;ABC's last dividend was $5.4. The dividend;growth rate is expected to be constant at 25% for 3 years, after which;dividends are expected to grow at a rate of 6% forever. If the firm's required;return (rs) is 17%, 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 points;Question 13;ABC Inc., is expected to pay an annual;dividend of $5.5 per share next year. The required return is 19.2 percent and;the growth rate is 4.3 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 points;Question 14;ABC?s last dividend paid was $2.6, its;required return is 12.6%, its growth rate is 3.4%, 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 points;Question 15;The common stock of Connor, Inc., is selling;for $31 a share and has a dividend yield of 5 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 points;Question 16;If last dividend = $4.7, g = 5.5%, and P0;= $74.4, 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 points;Question 17;A stock just paid a dividend of D0;= $1.1. The required rate of return is rs = 14.2%, and the constant;growth rate is g = 5.6%. 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 points;Question 18;ABC Enterprises' stock is currently selling;for $78.7 per share. The dividend is projected to increase at a constant rate;of 5.3% 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 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 points

Paper#48987 | Written in 18-Jul-2015

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