Tuesday, November 12, 2019

Jen's Fashions is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years


Jen's Fashions is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 8 percent thereafter. The required return is 12 percent and the company just paid a $3.80 annual dividend. What is the current share price? 
 
A. 
$128.96

B. 
$131.11

C. 
$135.95

D. 
$148.87

E. 
$152.20


 

108.
Hardwoods, Inc. is a mature manufacturing firm. The company just paid a $10 dividend, but management expects to reduce the payout by 9 percent each year, indefinitely. How much are you willing to pay today per share to buy this stock if you require a 15 percent rate of return? 
 
A. 
$34.79

B. 
$37.92

C. 
$38.27

D. 
$41.33

E. 
$42.09


 


109.
Bechtel Machinery stock currently sells for $65 per share. The market requires a 14 percent return on the firm's stock. The company maintains a constant 8 percent growth rate in dividends. What was the most recent annual dividend per share paid on this stock? 
 
A. 
$3.00

B. 
$3.61

C. 
$3.67

D. 
$3.75

E. 
$3.91

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