umuc finc330 homework 5B latest june 2016

Homework 5B

Question 1 1
/ 1 point
The last dividend of Delta, Inc. was $8.82, the growth rate
of dividends is expected to be 2.18 percent, and the required rate of return on
this stock is 9.51 percent. What is the stock price according to the constant
growth dividend model?

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Round the answer to two decimal places.

Question 2 1
/ 1 point
The next year the common stock of Gold Corp. will pay a
dividend of $6.17 per share. If the company is growing at a rate of 5.32
percent per year, and your required rate of return is 14.91 percent, what is
Gold’s company stock worth to you?

Round the answer to two decimal places.

Question 3 1
/ 1 point
The Black Forest Cake Company just paid an annual dividend
of $4.39. If you expect a constant growth rate of 5.70 percent, and have a
required rate of return of 12.29 percent, what is the current stock price
according to the constant growth dividend model?

Round the answer to two decimal places.

Question 4 1
/ 1 point
You are considering the purchase of a share of Alfa Growth,
Inc. common stock. You expect to sell it at the end of one year for $71.63 per
share. You will also receive a dividend of $2.99 per share at the end of the
next year. If your required return on this stock is 9.11 percent, what is the
most you would be willing to pay for Alfa Growth, Inc. common stock now?

Round the answer to two decimal places.

Question 5 1
/ 1 point
Green Company’s common stock is currently selling for $72.83
per share. Last year, the company paid dividends of $1.10 per share. The
projected growth at a rate of dividends for this stock is 5.95 percent. Which
rate of return does the investor expect to receive on this stock if it is
purchased today?

Round the answer to two decimal places in percentage form.
(Write the percentage sign in the “units” box).

Question 6 1
/ 1 point
Digging Deep Company’s common stock is currently selling for
$187.56 per share. Next year, the company dividend is expected to be $5.57 per
share. The projected growth at a rate of dividends for this stock is 5.33
percent per year. What rate of return does the investor expect to receive on
this stock if he or she purchases the stock today?

Round the answer to two decimal places in percentage
form.(Write the percentage sign in the “units” box).

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