You believe that the Non-Stick Gum Factory will pay a dividend of $2 on its...
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Finance
You believe that the Non-Stick Gum Factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 8% a year in perpetuity. If you require a return of 15% on your investment, how much should you be prepared to pay for the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Stock price.
Fincorp will pay a year-end dividend of $2.60 per share, which is expected to grow at a rate of 2% for the indefinite future. The discount rate is 6%.
a. What is the stock selling for? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Stock price
b. If earnings are $3.60 a share, what is the implied value of the firms growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Implied value
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