1.Lohn Corporation is expected to pay the following dividends over the next four years: $17, $15,...

80.2K

Verified Solution

Question

Finance

1.Lohn Corporation is expected to pay the following dividendsover the next four years: $17, $15, $10, and $5. Afterward, thecompany pledges to maintain a constant 4 percent growth rate individends forever. If the required return on the stock is 12percent, what is the current share price?
2. A7X Corp. just paid a dividend of $1.30 per share. Thedividends are expected to grow at 35 percent for the next 9 yearsand then level off to a growth rate of 9 percentindefinitely.
If the required return is 14 percent, what is the price of thestock today?

Answer & Explanation Solved by verified expert

4.4 Ratings (930 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

1.Lohn Corporation is expected to pay the following dividendsover the next four years: $17, $15, $10, and $5. Afterward, thecompany pledges to maintain a constant 4 percent growth rate individends forever. If the required return on the stock is 12percent, what is the current share price?2. A7X Corp. just paid a dividend of $1.30 per share. Thedividends are expected to grow at 35 percent for the next 9 yearsand then level off to a growth rate of 9 percentindefinitely.If the required return is 14 percent, what is the price of thestock today?