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 your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.