Required return from common shareholders

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1. If the dividend in year 3 is $1.20 and the growth factor is 3%, then the dividend in year 7 is equal to?

2. A company is expected to pay their first annual dividend 2 years from now. That payment will be $1.50 a share. Starting in Year 3, the company will increase the dividend by 5% per year. The required return from common shareholders is 15%. What is the estimated value of this stock today?

3. A firm just paid their annual dividend of $2.0 a share. They recently announced that all future dividends will be increased by 5% annually. What is one share of this stock worth to you if you require a 15% rate of return?

Reference no: EM131412176

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