Purchase Solution

China S Construction PV of dividend and yield

Not what you're looking for?

Ask Custom Question

Please see the attached file for details.

Problem 12-11 --> Common Stock, Valuation Per Share

China S. Construction, Inc. is in the business of building electrical power plants in the eastern United States. Jack Godell and the rest of the board members of the firm have just announced a $4 per share dividend on the corporation's common stock to be paid in one year. Because the quality of some of its recent projects is under attack by investigative television reporters, the expected constant dividend growth rate is only estimated to be 1 percent. The required rate of return for similar stocks in this industry is 16 percent.

a. What is the present value of the expected dividends from one share of China S. Construction's common stock?
b. What is the stock's dividend yield (D/P)

Problem 12-12 --> Yield on Common Stock

The current listed price per share of a certain common stock is $15. The cash dividend expected from this corporation in one year is $2 per share. All market research indicates that the expected constant growth rate in dividends will be 4 percent per year in future years. What is the rate of return on this investment that an investor can expect if share are purchased at the current listed price.

Attachments
Purchase this Solution
Solution Summary

The solution examines China S Construction PV of dividend and yield.

Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Motivation

This tests some key elements of major motivation theories.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

View More Free Quizzes
Related BrainMass Solutions

  • Finance: Steps for TI BA II Plus for Von Burns dividend yield, capital gain yield

    What will be VBTL's dividend yield and capital gains yield once its period of supernormal growth ends?

  • Stock Valuation

    Last year's dividend D0 = $1.00 per share and the firm's required return is 15 percent. Trying to find current price of the common stock? and the capital gains yield, dividend yield, and total yield in year 1?

  • Stock Valuation and Present Value

    Dividend yield = Expected Dividend/Stock Price Stock Price = Expected Dividend/Dividend Yield = 2.40/0.08=$30 2. We are given the future value and we have to find the present value.

  • STOCK VALUATION TODAY AND IN THE FUTURE

    current value of the stock, add the PV of the dividends in step 2 to the PV of the stock price in Step 4 P0 = $32.04 + 2.30 + 2.44 + 2.38 = Complete it • What are the expected dividend yield and capital gains yield during the first year?

  • A Discussion On Index And Interest Rate Futures

    Suppose the S&P 500 index is at 315.34. The dividend yield on the index is 2.89 percent. If T-bills yield 8.97 percent, what is the fair value of an S&P futures contract that calls for delivery in 106 days? 3.

  • Finance Related Questions on Bond and Stock Valuation

    You expect it to pay dividends of $1.07; $1.1449 and $1.2250 in years 1, 2 and 3 respectively and you expect to sell it at a price of $26.22 at the end of 4 years. a) Calculate the growth rate in dividends and the expected dividend yield.

  • Stock and Bond questions

    At 8% the PV is 114 and at 9% the PV is 112. The YTM will be inbetween 8% and 9% since the PV we are looking for is 113. We use the technique of extraploation. When the discount rate changes by 1% (8% to 9%) the PV changes by 2(114 to 112).

  • NPV/IRR/Stock valuation

    Total return on a stock = Dividend Yield + Growth Rate We are given the total return and the dividend yield Growth rate g = 10%-6%=4% Now dividend yield = D1/MP Where D1 is the expected dividend and MP is the market price D1 = 40X6%=$2.40 - This

  • Valuing bond and common stocks

    It is a case of ordinary annuity with amount C=$90, discount rate=semi annual yield=6% and number of period=20.

View More Related Solutions