Author Question: Google has just declared a dividend of $2.12 on its common stock. Dividends are paid annually. ... (Read 78 times)

Tirant22 · **on:** Apr 25, 2021

Question 1

Given the following information, calculate the expected capital gains yield for Chicago Bears Inc.: beta = 0.6; Km = 15%; Krf = 8%; D1 = $2.00: Po =$25.00. Assume the stock is in equilibrium and the exhibits constant growth.
◦ 3.8%
◦ 0%
◦ 8.0%
◦ 4.2%
◦ 12.2%

Question 2

Google has just declared a dividend of $2.12 on its common stock. Dividends are paid annually. Dividends are expected to grow at the rapid pace of 10% for the next 4 years, after which growth is expected to slow to 3% per annum forever. During the rapid growth phase, the required return on this investment will be 20%, and it is expected to drop to 12% when growth slows. What is the current market value of this stock?
◦ $19.73
◦ $23.98
◦ $25.33
◦ $29.43
◦ $74.70

verrinzo · **Reply #1 on:** Apr 25, 2021

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