5. Twelve Monkeys Corporation is expected to pay the following dividends over th

Question

5. Twelve Monkeys Corporation is expected to pay the following dividends over the next four years: $17, $13, $12, and $7.50. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 15 percent, what is the current share price? (Round your answer to 2 decimal places. (e.g., 32.16))

6. Freddy's BBQ Joint's stock currently sells for $51 per share. The market requires a return of 8.2 percent on the firm

6. Freddy's BBQ Joint's stock currently sells for $51 per share. The market requires a return of 8.2 percent on the firm

Explanation / Answer

5

Price = P.V. of future dividends
= 17/(1+15%)1 + 13/(1+15%)2 + 12/(1+15%)3 + 7.5/(1+15%)4 + 7.5*(1+5%)/(1+15%)5 +

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