Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. ten years ago a xyz stock paid a $0.30 dividend. s

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

90.2K

Verified Solution

Question

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?

Answer & Explanation Solved by verified expert
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
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

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?

Other questions asked by students

Basic Math
1.2K views

Critics of television often refer to the detrimental effects that all the violence shown on television...

Advance Math
1.2K views

The number of new businesses established in the US since 1990 can be modeled by the...

Medical Sciences
1.2K views

Which sequence of events most accurately describes the reactive hyperemia response Select one: a. Flow occlusion, ­ increased accumulation...

Physics
1.2K views

An attacker at the base of a castle wall 3.75 m high throws a rock straight...

Biology
1.2K views

critical immunization threshold The critical immunization threshold symbolized pe is the minimum proportion of a...

Basic Math
1.2K views

For which quadrant s is cosine positive Quadrant 1 Quadrant 2 Quadrant 3 Quadrant 4

Accounting
1.2K views

You are a Custom Home Builder and was hit hard by the economic downfall of...

Accounting
1.2K views

Please complete the following accounting project for me. Thank you ...

Accounting
1.2K views

On March 15, 2023, Starz Hardware Limited, a manufacturer of pipe fittings, shipped a consignment...

Accounting
1.2K views

Marathon Inc. (a C corporation) reported $1,000,000 of taxable income in the current year. During...

Accounting
1.2K views

Continuous improvement is: a. Philosophy of production rather than a principle b. Is...

Finance
1.2K views

Which one of the following has the highest effective annual rate? Multiple Choice 6 percent...