Tuesday, November 12, 2019

Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $0.12 a share

Renew It, Inc., is preparing to pay its first dividend. It is going to pay $0.45, $0.60, and $1 a share over the next three years, respectively. After that, the company has stated that the annual dividend will be $1.25 per share indefinitely. What is this stock worth to you per share if you demand a 10.8 percent rate of return on stocks of this type? 
 
A. 
$6.67

B. 
$8.21

C. 
$10.14

D. 
$11.47

E. 
$12.03


 


83.
Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $0.12 a share. The following dividends will be $0.15, $0.20, $0.50, and $0.75 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 4 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.5 percent? 
 
A. 
$11.67

B. 
$11.94

C. 
$12.78

D. 
$13.50

E. 
$13.86


 


84.
Crystal Glass recently paid $3.60 as an annual dividend. Future dividends are projected at $3.80, $4.10, and $4.25 over the next 3 years, respectively. Beginning 4 years from now, the dividend is expected to increase by 3.25 percent annually. What is one share of this stock worth to you if you require a 12.5 percent rate of return on similar investments? 
 
A. 
$42.92

B. 
$43.40

C. 
$45.12

D. 
$45.88

E. 
$46.50

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