Hi Tutor Having Trouble Figure Out These Question Can You Help To Solve And Show (1)
Having trouble figure out these question, can you help to solve and show details on the following questions,
- Company Y is expected to produce a level dividend stream of $5 a share. If the market capitalization is 10 percent, what is the current stock price of Company Y? (Note: The market capitalization is the market consensus estimate of the appropriate discount rate for a firm’s cash flow.)
- Company Z’s earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year’s dividend is $10 and the market capitalization rate is 8%, what is the current stock price?
- Company Z-prime is like Z in all respects except one: Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings (estimated as $18.00) as dividends. What is Z-prime’s stock price?