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25. Current Price - Future Price (Stock)
Dividend Yield – Cap Gains Yield – Exp Rate of Return-2-2Preferred Products has issued preferred stock with an $5.90 annual dividend that will be paid in perpetuity.a.If the discount rate is 10%, at what price should the preferred sell?b.At what price should the stock sell 1 year from now?c.What is the dividend yield, the capital gains yield, and the expected rate of return of the stock? (Leave no cells blank - be certain to enter "0" wherever required.)26. Exp Rate of Return (Stock)-2-2Waterworks has a dividend yield of 10.00%. If its dividend is expected to grow at a constant rate of 7.00%, what
must be the expected rate of return on the company’s stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)27. Exp Rate of Return – Stock Price-2-2Steady As She Goes, Inc., will pay a year-end dividend of $3.20 per share. Investors expect the dividend to grow at a rate of 6% indefinitely.a.If the stock currently sells for $32 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations.)b.If the expected rate of return on the stock is 18.5%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Explanation:)28. Exp Dividend (Stock)-2-2Integrated Potato Chips paid a $1.40 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 5% per year.a.What is the expected dividend in each of the next 3 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b.If the discount rate for the stock is 11%, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)c.What is the expected stock price 3 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)d.If you buy the stock and plan to hold it for 3 years, what payments will you receive? What is the present value of those payments? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.)Year 1Year 2Year 3DIV$ 1.47 ± 1%$ 1.54 ± 1%$ 1.62 ± 1%Selling price0028.35 ± 1%Total cash flow1.47 ± 1%1.54 ± 1%29.97 ± 1%PV of cash flow1.32 ± 1%1.25 ± 1%21.91 ± 1%Explanation:Some values below may show as rounded for display purposes, though unrounded numbers should be used for the actual calculations.