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1. Analysts have identified a stock that is expected to pay a dividend of $4 at the end of this year and $6 at the end of next year. If the expected stock price at the end of the second year is $80, what is the value of the stock today? Assume a required rate of return of 12%.

2. What is the value today of a share of stock that just paid a dividend of $4 and is expected to have constant growth of 6% if the required rate of return is 14%?

3. A company just paid a dividend of $3 and has a required rate of return of 10%. If the most recent EPS was $8 and the company’s ROE is 12%, what is the value of a share of the company’s stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92857154

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