1. Thiess Industries just paid a dividend of $1.50 a share (ie.. Do - $1.50). The dividend is expected to pow 5% a year for the next 3 years and then 10% a year thereafter. What ls the expected dividend per share for each of the 11011 5 years?
2. Boehm Incorporated is expected to pay a $130 per share dividend at the end of this year (ie., D, $1.50). 'the dividend is expected to grow at a constant rate of 6% a year. The required rate of return on the stock, r„ is 13%. What is the estimated value per share of Boehm's stock?
3. Woiddce Manufacturing's stock currently sells for 522 a share. The stock jun paid a dividend of S1.20 a share (ie.. Do - $1.20). and the dividend is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the estimated required rate of return on Woidtke's stock (assume the market is in equilibrium with the required return equal in the expected return)?
4. Nick's Enchiladas Incorporated has preferred stock outstanding that pays a dividend of Si at the end of each year. The preferred sells for SSO a share. What Is the stock's required rate of return (assume the market t. in equilibrium with the required return equal to the expected return)?
5. A company currently pays a dividend of $2 per share (D0 = $2). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years. and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.2, the risk-free rate Is 7" and the market risk premium is 4%. What is your estimate of the stock's current price?
6. EMC Corporation has never paid a dividend. Its current free cash Bow of 54001100 is expected to grow at a constant rate of 5%. The weighted average cast of capital is WACC 12%. Calculate ales estimated value of operations.
7. Current and projected free cash Bows fox Paden Global Operations arc shown below. Growth is expected to be constant after 2015. and the weighted average cost of capital is 11%. What is the horizon (continuing) value at 2016 if growth from 2015 remains constant?
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Actual
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Projected
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|
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2013
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2011
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2015
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2016
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Free cash now
(millions of dollen)
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$606.82
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$667.50
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$707.55
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$750.00
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A stock is trading at SRO per share. The stock is expected to have a year-end dividend of S4 per share (DI - S4). and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of g?
8. Crisp Cookware's common stock is expected to pay a dividend of $3 a share at the end of this year (0, 53.00); its beta is 0.8; the risk-free rate is 5.2%; and the market risk premium is 6%. The dividend is expected to grow at some constant rate g. and the stock currently sells for 540 a share. Assuming the market is In equilibrium, what does the market believe will be the stock's price at the end of 3 years (ie., what is 1).0?