FINANCE-ABC Company’s last dividend was $4.3.The dividend growth rate

QUESTION

QUESTION 1 Show Work
in Excel
1.
ABC 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 points
QUESTION 2
1.
ABC Enterprises’ stock is currently selling for $54 per
share.The dividend is projected to increase at a constant rate of 3.1%
per year.The required rate of return on thestockis 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
QUESTION 3
1.
The common stock of ABC Industries is valued at $88.6 a share. The
company increases their dividend by 12.9 percent annually and expects
their next dividend to be $4.7. What is the required rate of return on this
stock? That is, solve for r.

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 4
1.
ABC is expected to pay a dividend of $5.5 per share at the
end of the year. The stock sells for $64 per share, and its required rate of return is
18.5%. 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 5
1.
A stock isexpectedto pay a dividend of $1.6 at the end of the
year. The required rate of return is rs= 9.6%, and the expected
constant growth rate is g = 7.7%. 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 6
1.
If D0= $4.7,
g = 7.8%, and P0=
$67.9, what is the required rate of return on the stock? That is, solve for r.

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 7
1.
ABC’s last dividend paid was
$1, its required return is 14.6%, its growth rate is 4.4%, 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 8
1.
ABC’s last dividend was $1.8.The
dividend growth rate is expected to be constant at 26% for 3 years, after which
dividends are expected to grow at a rate of 5% forever.If the firm’s required return (rs)
is 15%, 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 9
1.
If D1=
$2, g (which isconstant) = 2.4%, and P0= $70.4, what is the required rate of return on the stock? That
is, solve for r.

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 10
1.
A stock just paid a dividend of D0 = $0.5. The required rate
of return is rs = 14.3%, and the constant
growth rate is g = 5.1%. 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 11
1.
ABC’s stock has a required rate of return of 12.8%, and it sells
for $60 per share.The dividend is expected to grow at a constant rate of 8.4% 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
1.
If D1=
$2.49 and P0=
$111.11, what is the dividend yield?
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 13
1.
ABC just paid a dividend of D0= $4.Analysts expect the company’s dividend to grow by 33% this year,
by 28% in Year 2, and at a constant rate of 6% in Year 3 and thereafter.The required return on this stock is 17%.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 14
1.
The common stock of Wetmore Industries is valued at $44.1 a share.
The company increases their dividend by 3.5 percent annually and expects
their next dividend to be $1.4. What is the required rate of return on this
stock? That is, solve for r.

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 15
1.
ABC Inc., is expected to pay an annual dividend of $3.7 per
share next year. The required return is 16.4 percent and the growth rate
is 3.5 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 16
1.
ABC Enterprises’ stock is expected to pay a dividend
of $1.2 per share.The
dividend is projected to increase at a constant rate of 4% per year.The required rate of return on thestockis 14.4%.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.

ANSWER:

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