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
implication tructures of various market structures for price determination

how does the prices system affect a country

The act of production involves the transformation of inputs into output. Production is a transformation of physical inputs into physical inputs into physical output. The output is

The production function for a firm is expressed as follows: Q = 800K - K 2 +5KL - 7750L + 10,000 Where Q is quantity of units manufactured, K and L are units of capital and


Selective in Exports: There are many industries where India has an advantage because of relatively lower costs of all forms of manpower whether it is professional or factory l

Law of conservation of mass was proposed by Lavoisier & verified by Landolt. According to Law of conservation of mass law Matter is neither created nor destroyed in the course of c

In the short run, the size of the plant is fixed whereas in the long run a firm can adjust its plant size. One of the choices in the long run will be the short run plant size. That

A firm in a perfectly competitive product market takes the price of the product as given. Similarly, a firm in a perfectly competitive factor market takes the price of the factor