1) Thames Inc.'s most recent dividend was $2.40 per share (i.e., Do = $2.40). The dividend is expected to grow at a rate of 6% per year. The risk-free rate is 5 percent and the return on the market is 9 percent. If the company's beta is 1.3, what is the price of the stock today?
Solution Preview
** Please see the attached file **
Thames Inc.'s most recent dividend was $2.40 per share (i.e., Do = $2.40). The dividend is expected to grow at a rate of 6% per year. The risk-free rate is 5 percent and the return on the market is 9 percent. If the company's beta is 1.3, what is the price of the stock today?
First we will ...
Solution Summary
Stock price has been calculated using CAPM and Dividend Discount method.
... Variable Call Value Put Value Stock price (↑) Increase Decrease. ... Variable Call Value Put Value Stock price (↑) Increase Decrease. ...
Fit autoregressive model to GE stock price under different order. Problem 16.30 GE.xls Autoregression. ... So the equation is stock price=2.975+0.925(Lag1). ...
Calculating required rate of return, present value, stock price. ... 3. Suppose the firm's expected growth rate is 5% now, what is the price of the stock? ...
Payout stock price, calculate ratios, growth rate, merger facts. 8. Cash Dividends. The stock of Payout Corp. ... a. What price is Payout stock selling for today? ...
... $2 Dividend for next year= Div1 = 1.90 =(1+(-5.%)) *2 Cost of equity= r= 15% growth rate of dividends/earnings= g= -5% Current stock price= Po= Plugging in the ...
... You will use both the CAPM (Capital Asset Pricing Model) and the Constant Growth Model (CGM) to arrive at IBM's stock price. ...Stock price = Industry PE x EPS. ...
