Determine the dividend yield and current stock price, Microeconomics

The Bloomington Electric Company operates in a stable industry and therefore has predictable dividend growth of 8% per year. The most recent annual dividend was paid yesterday in the amount of $4. Assume the appropriate discount rate is 15%.

a. what is the current stock price?

b. Assuming the annual growth rates for the next three years is 20% each year; but starting the fourth year and after the growth rate remains constant at 8%. What is the current stock price under this scenario?

c. Assuming a dividend growth rate of 8%, what is the dividend yield of this stock if the current stock price is $40?

Posted Date: 3/2/2013 2:25:18 AM | Location : United States







Related Discussions:- Determine the dividend yield and current stock price, Assignment Help, Ask Question on Determine the dividend yield and current stock price, Get Answer, Expert's Help, Determine the dividend yield and current stock price Discussions

Write discussion on Determine the dividend yield and current stock price
Your posts are moderated
Related Questions
critically analysis firm theory of profit maximization?

When does deadweight loss occur to society? Applying consumer and producer surplus the efficiency costs of a tax: A tax causes a deadweight loss to society, since less the g

Q. Describe Classical Economics? Classical Economics:Tradition of economics which began with Adam Smith and continued with other theorists including Thomas Malthus, David Ricar

meaning of opportunity cost under theory of cost

define economics in plural sense. .

i when should continue to produce in the short run

Identify the four essential economic activities. The four main economic activities are: a)  resource maintenance, b)  production, c)  distribution, and d) consumpti

explain what will happen to price , the marginal cost of rice, and the quantity produced if the government sets a production quota of 2000 bags a week. draw a graph and explain you

Business Meeting Etiquette: Before meetings, the correct way to arrange a meeting is to take an appointment 3 to 4 weeks before, even though it is known that generally gatherings w

Explain the how the classical school views the role of markets and government intervention in fighting business cycles The classical school believes in the smooth functioning o