plow-back rate - the return on equity (ROE).Ĭ. plow-back rate/the return on equity (ROE).ī. One can estimate the dividend growth rate for a stable firm asĪ. (dividend yield) × (expected rate of growth in dividends). Dividend yield/expected rate of growth in dividends.ĭ. Dividend yield + expected rate of growth in dividends.Ĭ. Dividend yield - expected rate of growth in dividends.ī. One can estimate the expected rate of return or the cost of equity capital asĪ. On the stock is 16 percent, what is the current value of the stock, after paying the dividend? has just now paid a dividend of $2 per share ( Div 0 ) its dividends areĮxpected to grow at a constant rate of 6 percent per year forever. that dividends grow at a constant rate g, forever, and r > g only. that dividends grow at a constant rate g, forever only.Ĭ. The constant dividend growth formula P 0 = Div 1 /( r - g ) assumes.Ī. Return on the stock is 15 percent, what is the current value of the stock? The end of year 2, and then be sold for $32 per share at the end of year 2. Is 20 percent, what is the current value of the stock?ĭeluxe Company expects to pay a dividend of $2 per share at the end of year 1, $3 per share at If the required rate of return for the stock Immediately sell their shares for $115 dollars per share. its expected future dividends and its discount rate.ĬK Company stockholders expect to receive a year-end dividend of $5 per share and then the number of shares outstanding and the number of its shareholders.ī. The valuation of a common stock today primarily depends onĪ. It is expected that, at theĮnd of one year, it will pay a dividend of $6 per share and then be sold for $114 per share.Ĭalculate the expected rate of return for the shareholders. Super Computer Company's stock is selling for $100 per share today. The dividend yield reported on finance.yahoo is calculated as follows: ![]()
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