2011 Spring, FIN 3250, Chapter 8 Key
i>clickers for March 30 were 15 and 8, i>clickers for April 1 will be 9, 37, and 30, Homework for April 4 will be Problems, 4, 13
15) Annual Dividend = $ 1.65
Required Return = 12%
Price = $ 13.75
k for April 4 will be Problems, 4, 13, 20, 25, 28, 29, 34, 38, 40
2011 Spring, FIN 3250, Chapter 8 Key
i>clickers for March 30 were 15 and 8, i>clickers for April 1 will be 9, 37, and 30, Homework for April 4 will be Problems, 4, 13
8) Price = $ 50.00
Market Return = 15%
Dividend Growth Rate = 8%
Annual Dividend = $ 3.24
April 4 will be Problems, 4, 13, 20, 25, 28, 29, 34, 38, 40
2011 Spring, FIN 3250, Chapter 8 Key
i>clickers for March 30 were 15 and 8, i>clickers for April 1 will be 9, 37, and 30, Homework for April 4 will be Problems, 4, 13
9)
Annual Dividend = $ 1.15
Dividend Growth Rate = 2.6%
Required Return = 12.0%
Next Dividend = $ 1.18
Price = $ 12.55
April 4 will be Problems, 4, 13, 20, 25, 28, 29, 34, 38, 40
2011 Spring, FIN 3250, Chapter 8 Key
i>clickers for March 30 were 15 and 8, i>clickers for April 1 will be 9, 37, and 30, Homework for April 4 will be Problems, 4, 13
37)
Dividend 1 = $ 0.12 Period Cash Flow
Dividend 2 = $ 0.15 1 $ 0.12
Dividend 3 = $ 0.20 2 $ 0.15
Dividend 4 = $ 0.50 3 $ 0.20
Dividend 5 = $ 0.60 4 $ 0.50
Ultimate Dividend Growth Rate = 4.0% 5 $ 0.60
Required Return = 8.5%
Sum =
Price = $ 10.38
Period Cash Flow
6 0.624
omework for April 4 will be Problems, 4, 13, 20, 25, 28, 29, 34, 38, 40
Discounted Cash Flow
$ 0.11
$ 0.13
$ 0.16
$ 0.36
$ 0.40
$ 1.15
Perpetuity Value Discounted Perpetuity Value
$ 13.87 $ 9.22
2011 Spring, FIN 3250, Chapter 8 Key
i>clickers for March 30 were 15 and 8, i>clickers for April 1 will be 9, 37, and 30, Homework for April 4 will be Problems, 4, 13
30)
Annual Dividend = $ 7.50
Price = $ 59.70
Required Return = 12.56%
k for April 4 will be Problems, 4, 13, 20, 25, 28, 29, 34, 38, 40