Q3: ABC Inc.'s first quarterly dividend of $2 per share is expected to be paid nine months from today. From then on, dividends will decline by 2% per quarter for next three years. After three years, the dividends will start increasing by 1% per quarter in perpetuity. Assume that ABC's required rate of return is 15% (Effective annual rate). What is the price of a share of ABC today? (the answer is 53.91) PLEASE EXPLAIN WITHOUT EXCEL!
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- A company is currently paying dividend of Tk. 40 per share. The dividend is expected to grow at a 20% annual rate for two years, then at 15% rate for the next two years and then at 10% rate for the next two years, after which it is expected to grow at a 5% rate forever. What should be the current price of the share if required rate of return is 12%? (Consider upto 3 decimal placein case of all fractions).How much would you be prepared to pay for a share in two years' time when it begins to pay a $0.17 dividend each year and is currently priced at $3? Assume the required rate of return is 8.5% p.a.9. CEPS Group announced today that it will begin paying annual dividends next year. The first dividend will be OMR 0.25 a share. The following dividends will be OMR 0.27, OMR 0.34, OMR 0.45, and OMR 0.52 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 3 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 7.5 percent?
- Q4. Firm DEF has just paid a quarterly dividend of $3.75. Dividends are expected to grow by 10% for the next 4 quarters, and then grow by 1.4% thereafter. Firm DEF has a required quarterly return of 5%. Show all work for each part of the problem that requires computation. a) What is the expected dividend in four quarters? b) What is the horizon value in the fourth quarter (P4)? c) What is the intrinsic value of the stock today? d) How would you critique the model you used for calculating the intrinsic value? In other words, what are its shortcomings, if any?The FI Corporation's dividends per share are expected to grow indefinitely by 6% per year. Required: a. If this year's year-end dividend is $5.00 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? Note: Round your answer to 2 decimal places. b. If the expected earnings per share are $10.00, what is the implied value of the ROE on future investment opportunities? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. How much is the market paying per share for growth opportunities (i.e., for an ROE on future investments that exceeds the market capitalization rate)? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Current stock price b. Value of ROE c. Amount % per shareWhizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. i) Compute the current stock price for Whizcom Inc.ii) What would be the likely stock price in year 5?iii) What would be per annum rate of return implied by a change in prices from time 0 to time 5?
- 9. CEPS Group announced today that it will begin paying annual dividends next year. The firstdividend will be OMR 0.65 a share. The following dividends will be OMR 0.72, OMR 0.85,OMR 0.89, and OMR 0.95 a share annually for the following 4 years, respectively. After that,dividends are projected to increase by 4 percent per year. How much are you willing to pay tobuy one share of this stock today if your desired rate of return is 11.5 percent? notes: show all calculation1. Company TYK forecasts that it will begin paying dividends seven years from now, at which point dividends are $1 per share. Thereafter, dividends are expected to growth at a constant rate of 6% per year. The discount rate for TYK is 10%. How much would you pay for one share in Company TYK?If the last dividend paid by Chemical Brothers Inc. was $1.25 and analysts expect these payments to increase 4% per year, what will the stock price be next year if the required return is 15%? Select one: O a. $12.29 O b. $11.82 O c. $31.25 O d. $12.78 O e. $23.11
- News Corp is expected to pay a dividend of $0.8 in one year. The dividend is expected to grow at 12% in the following 3 years and then at a constant rate of 4% per annum indefinitely. If the required rate of return is 12%, what is the price of the company's share today? Please illustrate your answer using a timeline.Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. a) What would be the likely stock price in year 5? b) What would be per annum rate of return implied by a change in prices from time 0 to time 5?Cortez, Inc., is expecting to pay out a dividend of $2.5 next year. After that it expects its dividend to grow by 25 cents per year for the next 3 years. what is the present value of dividends over the four year period if the required rate of return is 9 percent? (do not round intermediate calculations. round final answer to two decimal places.) $11.88 $11.06 $7.61 $9.23 none of these