1. SDA Co. next year will pay a $0.70 dividend. Assuming no growth in dividends
ID: 2631721 • Letter: 1
Question
1. SDA Co. next year will pay a $0.70 dividend. Assuming no growth in dividends and shareholders face a discount rate of 12%, what is the price of SDA Co. today?
$7.00
$5.83
$8.40
$6.55
2. AA Co. has just paid a dividend of $0.52. Next year's dividend is expected to be 15% higher, after which the dividend will remain the same indefinitely. Assuming shareholders require a rate of return of 20%, what is the price of the stock today?
$2.60
$10.40
$2.99
$11.96
3. TLF Co. has just paid a dividend of $2.00. It is expected that dividends will grow by 4% indefinitely. Assuming a discount rate of 12%, what is the current price of TLF Co?
$33.33
$15.30
$26.00
$17.33
$7.00
$5.83
$8.40
$6.55
Explanation / Answer
1-
$6.55
2-
$10.40
$33.33
$6.55
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.