Weisbro and Sons common stock sells for $42 a share and pays an annual dividend

Question

Weisbro and Sons common stock sells for $42 a share and pays an annual dividend that increases by 4.3 percent annually. The market rate of return on this stock is 10.00 percent. What is the amount of the last dividend paid by Weisbro and Sons? $1.73 $2.25 $2.50 $4.03 $2.30 Shares of common stock of the Samson Co. offer an expected total return of 12.4 percent. The dividend is increasing at a constant 4.5 percent per year. The dividend yield must be: 16.90 percent. 7.90 percent. 12.40 percent. 2.76 percent. 450 percent. Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $7 per share and has announced that it will increase the dividend by $5 per share for each of the next five years, and then never pay another dividend, If you require a return of 12 percent on the company?s stock, how much will you pay for a share today? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Q6)

Current Share price = (7+5)/1.12 + (7+5*2)/1.12^2 + (7+5*3)/1.12^3 + (7+5*4)/1.12^4 + (7+5*5)/1.12^5

Current Share price = $ 75.24

Q7)

Dividend Yield = 12.40 - 4.5 = 7.90%

B) 7.90%

Q8)

Current Dividend = (42*(10%-4.3%))/1.043

Current Dividend = 2.30

E) 2.30

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