A7X Corp. just paid a dividend of $1.70 per share. The dividends are expected to grow at 20 percent

3 answers
Question:

A7X Corp. just paid a dividend of $1.70 per share. The dividends are expected to grow at 20 percent for the next eight years and then level off to a growth rate of 5 percent indefinitely. If the required return is 15 percent, what is the price of the stock today

Answers

Dn = Do x (1+g)^n

D1 = 1.70 x (1+0.20)^1  = 2.04

D2 = 1.70 x (1+0.20)^2 = 2.448

Year  Dividend

1            2.040

2          2.448

3            2.938

4            3.525

5            4.230

6            5.076

7            6.091

8            7.310

Price at the end of 8th year = D8 x (1+g)/(Ke- g)

Price at the end of 8th year = 7.310 x (1+0.05)/ (0.15-0.05)

Price at the end of 8th year = $76.755

Year     Cash flows    PV Factor 15%     Present Value

1                2.040           0.8696                  1.77

2 .             2.448             0.7561                  1.85

3               2.938             0.6575                  1.93

4               3.525             0.5718                  2.02

5 .             4.230              0.4972                  2.10

6               5.076              0.4323                  2.19

7                6.091              0.3759                  2.29

8                84.065           0.3269                 27.48  

Total                                                            41.64

Hence,  the price of the stock today is $41.64

In edgenuity it's streets and roads.

Iam style 300 words your features choice clothes information based which performance

Similar Solved Works

3 answers

Contracts reflect employees' beliefs about what they owe the organization and what the organization

Contracts reflect employees' beliefs about what they owe the organization and what the organization owes them. relational cultural psychological transactional normative...
6 answers

Can you guys PLEASE Sub to THIS YT! It would help a lot and I wish you to have a great weekend!https://www. yout ube.

Can you guys PLEASE Sub to THIS YT! It would help a lot and I wish you to have a great weekend! https://www. yout ube. com/channel/UC9iu1ZdqCgK_G_2Yh1EsFv A (you will have to delete the space in the link)...
1 answer

Mrs. Allen has a rare condition for which two different brand name drugs are the only available treatment. She is concerned that

Mrs. Allen has a rare condition for which two different brand name drugs are the only available treatment. She is concerned that since no generic prescription drug is available and these drugs are very high cost, she will not be able to find a Medicare Part D prescription drug plan that covers eithe...
3 answers

What two ways BEST explains changes in Japan that were instituted by the United States after the war?Group of answer choicesDismantling

What two ways BEST explains changes in Japan that were instituted by the United States after the war? Group of answer choices Dismantling the military Dividing the nation in half according to religious beliefs. Partitioning of Japan by social class. Giving women the right to vote to expand more dem...
3 answers

Besides Canada, what other areas did those escaping slavery go too? PLEASE HELP EMERGENCY

Besides Canada, what other areas did those escaping slavery go too? PLEASE HELP EMERGENCY...
5 answers

Example of a Descriptive essay​

Example of a Descriptive essay​...
3 answers

Another way to think of the marginal seller is the seller who

Another way to think of the marginal seller is the seller who...
10 answers

Which of the following statements describes an example of natural selection acting on a population?

Which of the following statements describes an example of natural selection acting on a population?...
1 answer

Am nevoie urgent dau orice

Am nevoie urgent dau orice [tex]Am nevoie urgent dau orice[/tex]...
4 answers

Does anyone have ap language and composition on edge?

Does anyone have ap language and composition on edge?...
10 answers

Write an expression for each word phrase.5. a number decreased by three7. two more than three times a number9. the product

Write an expression for each word phrase. 5. a number decreased by three 7. two more than three times a number 9. the product of a number and 8 11. two less than three times a number 6. three-fourths of a number 8. seven less than a number 10. a number divided by 6 12. seven increased by a number...
3 answers

What does Boyle's law state about the relationships among temperature, volume,and pressure?When the

What does Boyle's law state about the relationships among temperature, volume, and pressure? When the pressure of a gas decreases, the volume and the temperature of the gas both increase. As the volume of a gas increases, the temperature and pressure of the gas both decrease. Provided temperature r...
4 answers

How lack of education affect communities​

How lack of education affect communities​...
1 answer

The john deere company has found that revenue, in dollars, from sales of heavy-duty tractors is a function

The john deere company has found that revenue, in dollars, from sales of heavy-duty tractors is a function of the unit price p, in dollars, that it charges. if the revenue r is r(p)=-1/2 p^2+1900p, answer the following questions: part a: how much revenue will the company generate if they sell 700...
3 answers

You connect a 250-2 resistor, a 1.20-mh inductor, and a 1.80-uf capacitor in series across a 60.0-hz,

You connect a 250-2 resistor, a 1.20-mh inductor, and a 1.80-uf capacitor in series across a 60.0-hz, 120-v (peak) source. the approximate impedance of your circuit a) 1.49 k22 b) 1.47 ko2 c) 0.4522 d) 250 22 e) none of these is correct....
3 answers

Which attribute of a photographer will a portfolio convey?A. diplomacyB. versatilityc. generosityD. sincerity

Which attribute of a photographer will a portfolio convey? A. diplomacy B. versatility c. generosity D. sincerity...
2 answers

List these ancestors of modern man, from oldest to youngest. australopithecus afarensis.homo erectus.

List these ancestors of modern man, from oldest to youngest. australopithecus afarensis.homo erectus. homo heidelbergensis. homo antecessor. homo habilis​...
3 answers

What must happen for a nation’s standard of living to improve?

What must happen for a nation’s standard of living to improve?...
4 answers

OH YA WALTER FLEX ON THEM HATERS

OH YA WALTER FLEX ON THEM HATERS [tex]OH YA WALTER FLEX ON THEM HATERS[/tex]...
4 answers

A=23 an= 5 n=10 find d

A=23 an= 5 n=10 find d...

-- 0.022564--