Formulas: a. If you expect that the dividend of each company will grow at the arithmetic mean growth rate of the last 5 years into the foreseeable future, what is the price at which you would be willing to buy these companies’ stocks? Worksheet: Formulas: a. Use the TREND function to forecast the next dividend payment of each company. If you expect that the dividend of each company will grow indefinitely at the growth rate implied by the forecasted value, what is the price at which you would be willing to buy these companies’ stocks? Worksheet: Formulas: 4. The financial information of four different companies is provided in the following table: Company A Company B Company C Company D Last Dividend $0.50 $0.75 Expected Dividend $1.25 $0.90 Required rate of Return 15% 14% 17% 12% Growth Rate #1 10.00% 9.00% 7.00% 8.00% Growth Rate #2 5.00% 3.00% 4.00% 2.00%
Formulas: a. If you expect that the dividend of each company will grow at the arithmetic mean growth rate of the last 5 years into the foreseeable future, what is the price at which you would be willing to buy these companies’ stocks? Worksheet: Formulas: a. Use the TREND function to forecast the next dividend payment of each company. If you expect that the dividend of each company will grow indefinitely at the growth rate implied by the forecasted value, what is the price at which you would be willing to buy these companies’ stocks? Worksheet: Formulas: 4. The financial information of four different companies is provided in the following table: Company A Company B Company C Company D Last Dividend $0.50 $0.75 Expected Dividend $1.25 $0.90 Required rate of Return 15% 14% 17% 12% Growth Rate #1 10.00% 9.00% 7.00% 8.00% Growth Rate #2 5.00% 3.00% 4.00% 2.00%
IM_Chapter_8_IM_Problem_Set.docx