# A stock is expected to pay a dividend

1. A stock is expected to pay a dividend of \$0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock’s current price?

a. \$17.39

b. \$17.84

c. \$18.29

d. \$18.75

e. \$19.22

2. A share of common stock just paid a dividend of \$1.00. If the growth rate for this stock is 5.4%, and if investors’ required rate of return is 11.4%, what is the stock price?

a. \$16.28

b. \$16.70

c. \$17.13

d. \$17.57

e. \$18.01

3. Company A’s stock currently sells for \$35.25 per share. The dividend is projected to increase at a constant rate of 4.75% per year. The required rate of return on the stock, rs, is 11.50%. What is the stock’s expected price 5 years from now?

a. \$40.17

b. \$41.20

c. \$42.26

d. \$43.34

e. \$44.46

4. If D0 = \$1.75, g (which is constant) = 3.6%, and P0 = \$32.00, what is the stock’s expected total return for the coming year?

a. 8.37%

b. 8.59%

c. 8.81%

d. 9.03%

e. 9.27%

5. Which one of following is the rate at which a stock’s price is expected to appreciate?

a. current yield

b. total return

c. dividend yield

d. capital gains yield

e. coupon rate

6. Company A has paid an annual dividend of \$1.00 per share on its common stock for the past fifteen years and is expected to continue paying a dollar a share long into the future. Given this, one share of the firm’s stock is:

a. basically worthless as it offers no growth potential.

b. equal in value to the present value of \$1 paid one year from today.

c. priced the same as a \$1 perpetuity.

d. valued at an assumed growth rate of one percent.

e. worth \$1 a share in the current market.

7. HCB currently pays an annual dividend of \$1.35 and plans on increasing that amount by 2.5 percent each year. VHB currently pays an annual dividend of \$1.20 and plans on increasing its dividend by 3 percent annually. Given this information, you know for certain that the stock of HCB has a higher ______ than the stock of VHB.

a. market price.

b. dividend yield.

c. capital gains yield.

d. total return.

e. The answer cannot be determined based on the information provided.

8. The common stock of TM pays an annual dividend of \$1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 percent annual return?

a. \$13.75

b. \$14.01

c. \$14.56

d. \$14.79

e. \$15.23

9. NG recently paid a \$2.80 annual dividend on its common stock. This dividend increases at an average rate of 3.8 percent per year. The stock is currently selling for \$26.91 a share. What is the market rate of return?

a. 13.88 percent

b. 14.03 percent

c. 14.21 percent

d. 14.37 percent

e. 14.60 percent

10. DS will pay an annual dividend of \$1.46 a share next year with future dividends increasing by 4.2 percent annually. What is the market rate of return if the stock is currently selling for \$42.10 a share?

a. 6.55 percent

b. 7.13 percent

c. 7.46 percent

d. 7.67 percent

e. 8.29 percent

11. GL Health Care common stock offers an expected total return of 9.2 percent. The last annual dividend was \$2.10 a share. Dividends increase at a constant 2.6 percent per year. What is the dividend yield?

a. 3.75 percent

b. 4.20 percent

c. 4.55 percent

d. 5.25 percent

e. 6.60 percent

12. Company A’s common stock returned a nifty 23.5 percent rate of return last year. The dividend amount was \$0.25 a share which equated to a dividend yield of 0.95 percent. What was the rate of price appreciation for the year?

a. 22.55 percent

b. 23.38 percent

c. 23.60 percent

d. 23.87 percent

e. 23.52 percent

13. Company A’s last dividend (D0) was \$1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm’s required return (rs) is 12.0%. What is the best estimate of the current stock price?

a. \$37.05

b. \$38.16

c. \$39.30

d. \$40.48

e. \$41.70

14. Company A just paid a dividend of D0 = \$1.32. Analysts expect the company’s dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value?

a. \$41.59

b. \$42.65

c. \$43.75

d. \$44.87

e. \$45.99

15. Company A’s last dividend (D0) was \$1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?

a. \$41.58

b. \$42.64

c. \$43.71

d. \$44.80

e. \$45.92

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Psychology
Good job.
Customer 453707, May 8th, 2022
Military
Very good job
Customer 456821, May 11th, 2022
English 101
Order was late
Customer 462805, April 4th, 2022
Education
GOOD
Customer 463813, April 20th, 2023
Medical Terminology
Thank you
Customer 454783, April 12th, 2022
Social Sciences
None
Customer 453751, June 14th, 2020
Other
Good job
Customer 456821, December 26th, 2022
Other
The paper was beautifully written. Thank you to the writer for amazing work and to customer for ensuring a quality product
Customer 452455, June 9th, 2023
history
Excellent responses.
Customer 463049, June 5th, 2022
Nursing
Job well done!!!
Customer 453939, February 24th, 2020
Web Design
Good work. Avoid such revisions.
Customer 452441, April 12th, 2022
Nursing
2 hrs late
Customer 454007, April 12th, 2020
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend