The Dividend Discount Model
The Dividend Discount Model
1.Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in one year, and its equity cost of capital is 15%. What price must you expect it to sell for right after paying the dividend in one year in order to justify its current price?
Krell Industries has a share price of $22 today. If Krell is expected to pay a dividend of $0.88 this year, and its stock price is expected to grow to $23.54 at the end of the year, what is Krell’s dividend yield and equity cost of capital?
Applying the Dividend-Discount Model
5. NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 15% per year?
LOOKING FOR THIS ASSIGNMENT OR A SIMILAR ONE? WE HAVE HAD A GOOD SUCCESS RATE ON THIS PAPER! ORDER WITH US TODAY FOR QUALITY WORK AND GET A DISCOUNT!
Disclaimer:
All types of paper that Discount Writers provides is only for the purpose of assistance! No text, paper, assignment, discussion would be similar with another student therefore guaranteeing Uniqueness and can be used with proper references only!
More tools: Better Grades: Choose your Homework Help:
Assignment Help: We would write your papers according to the instructions provided and guarantee you timely work
Entire Online Class Help: We are here for you and we would do your entire Class work from discussions, assignments, Replies, Exams and Quizzes at a Cost
Exam/ Quiz Help: We have a team of writers who specialize on exams from any specific field and we would give you an A+ Grade!
