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Ten years ago a XYZ stock paid a $0.30 dividend. Since then it has split two...

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Finance

Ten years ago a XYZ stock paid a $0.30 dividend. Since then ithas split two for one three times and three for two twice. XYZcurrent earnings per share are $1.40, and the payout ratio is 30%.The dividends are expected to grow with their historical rate forthe next three years. Beginning year four, XYZ return on equity isexpected to be 12%. If the firm’s appropriate discount rate is10.8% what the stock price should be?

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3.6 Ratings (305 Votes)
Current dividend EPSpayout ratio 1403042 Dividend 10 years ago adjusted for splits 03050505066066 0016335 Annual average growth rate last valueFirst value1Time between 1st and last value1100 0300163351101100    See Answer
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Ten years ago a XYZ stock paid a $0.30 dividend. Since then ithas split two for one three times and three for two twice. XYZcurrent earnings per share are $1.40, and the payout ratio is 30%.The dividends are expected to grow with their historical rate forthe next three years. Beginning year four, XYZ return on equity isexpected to be 12%. If the firm’s appropriate discount rate is10.8% what the stock price should be?

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