Use the historical dividend data below to calculate the constant growth rate, estimate the price of O'Brien Ltds’ common stock knowing that the investor has an 19% required rate of return. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $0.41 $0.48 $0.56 $0.65 $0.75 $0.88 $0.99 $1.10 $1.13 $1.39 Question 10Answer a. g= 17.50% and Price (P0) = $56.43 b. g= 14.04% and Price (P0) = $31.49 c. g= 27.4% and Price (P0) = $300.81 d. g= 14.53% and Price (P0) = $35.60
Use the historical dividend data below to calculate the constant growth rate, estimate the price of O'Brien Ltds’ common stock knowing that the investor has an 19% required rate of return. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $0.41 $0.48 $0.56 $0.65 $0.75 $0.88 $0.99 $1.10 $1.13 $1.39 Question 10Answer a. g= 17.50% and Price (P0) = $56.43 b. g= 14.04% and Price (P0) = $31.49 c. g= 27.4% and Price (P0) = $300.81 d. g= 14.53% and Price (P0) = $35.60
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 5MC
Related questions
Question
Use the historical dividend data below to calculate the constant growth rate, estimate the price of O'Brien Ltds’ common stock knowing that the investor has an 19% required
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
| $0.41 | $0.48 | $0.56 | $0.65 | $0.75 | $0.88 | $0.99 | $1.10 | $1.13 | $1.39 |
Question 10Answer
a.
g= 17.50% and Price (P0) = $56.43
b.
g= 14.04% and Price (P0) = $31.49
c.
g= 27.4% and Price (P0) = $300.81
d.
g= 14.53% and Price (P0) = $35.60
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