A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is rs 11%, and the expected constant growth rate is 5%. What is the current stock price?
The rate of return on the stock is dependent on the public's appraisal of the current economic situation and of the company. However, on the long term it is dependent on the management's efforts.
Data: current dividend= 1 Growth = 4% time period= 3 years solution dividend for first year= 1*(1+0.04) Expected Dividend for first year= 1.04 dividend for second year= 1.04(1+0.04) Expected dividend for the second year =1.082 dividend for third year= 1.082(1+0.04) Expected Dividend for Third Year = 1.124
11.04 12.40 13.76 15.00 9.42
Year one 1.04, two 1.044, three 1.052
70 percent dividend income exclusion on the tax returns of corporations. That is, if a corporation owns preferred stock, it can exclude 70 percent of dividend income and pay income taxes on only 30 percent of dividend income, both preferred and common stock.
the current price is $ . The price will be $ in 3 years and $ in 15 years
Stock price = div/K-gStock price = 1/6%-2%Stock price = 25Div = DividendK = rate of returng = growth rate
A corporation with a marginal tax rate of 34 percent would receive what after-tax dividend yield on a 12 percent coupon rate preferred stock bought at par assuming a 70 percent dividend exclusion?
Yes. For example a company with a 10p dividend that stays constant but whose net profit increases must be spending that net profit on assets or growth or other 'good' things that should increase the value of the company - otherwise they would pay it out and increase the divi!
The dividend will be 1.50(1.07)=1.605 for Year 1 1.605(1.07)=1.717 for Year 2 1.717(1.07)=1.838 for Year 3 1.838(1.05)=1.929 for Year 4 1.929(1.05)=2.026 for Year 5
a.A new common stock issues that paid $180 dividend last year. The par value of the stock is $15 and earnings per share have grown at a rate of 7 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains constant dividend-earnings ratio of 30 percent. The price of the stock is now 2750 + 5 % flotation costs I anticipated.
The dividend yield is the ratio of the annual dividend amount to the current price of the stock. So if the dividend is $1 and the current price is $50, the yield is 2 percent ($1/$50). But when the stock changes price the current dividend changes accordingly.
Answer : increase The time required to charge a capacitor to 63 percent (actually 63.2 percent) of full charge or to discharge it to 37 percent (actually 36.8 percent) of its initial voltage is known as the TIME CONSTANT (TC) of the circuit. Figure 3-11. - RC time constant. The value of the time constant in seconds is equal to the product of the circuit resistance in ohms and the circuit capacitance in farads. The value of one time constant is expressed mathematically as t = RC.
Assuming the face value of the share is Rs. 10/- then initial dividend % is 15% Year 1 - 20% which means Rs. 2/- Year 2 - 25% which means Rs. 2.5/- Year 3 - 30% which means Rs. 3/- Year 4 - 40% which means Rs. 4/- All dividends are per share under the assumption that the face value of the share is Rs. 10/-
To answer this question, the appropriate formula is the discounted dividend model without growth which is presented as follows: P = DIV / r where P = price of the stock DIV = the amount of the annual dividend r = the required rate of return Using the above formula: V = $6.50 / 6.5% = $6.50 / 0.065 = $100 The price of the stock would be approximately $100 using the discounted dividend model.
[Debit] Cash 1450 [Credit] dividend income 1450
Depending on whether you subtract actual value from expected value or other way around, a positive or negative percent error, will tell you on which side of the expected value that your actual value is. For example, suppose your expected value is 24, and your actual value is 24.3 then if you do the following calculation to figure percent error:[percent error] = (actual value - expected value)/(actual value) - 1 --> then convert to percent.So you have (24.3 - 24)/24 -1 = .0125 --> 1.25%, which tells me the actual is higher than the expected. If instead, you subtracted the actual from the expected, then you would get a negative 1.25%, but your actual is still greater than the expected. My preference is to subtract the expected from the actual. That way a positive error tells you the actual is greater than expected, and a negative percent error tells you that the actual is less than the expected.
required is the past tense or the past participle of verb require.require / required / required.Use require when making present simple sentences egThey require a ten percent deposit. OR The mechanic requires a ten percent deposit. OR She requires a ten percent deposit etc.Use required when making past simple sentences egThe travels agents required a ten percent deposit. OR He required a ten percent deposit etcUse the past participle required when making present/past perfect sentences egThey have required a ten percent deposit. He has required a ten percent deposit.Last year he had required a ten percent deposit.OR when making a passive sentence egA ten percent deposit is required.