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62.
The common stock of Textile Mills pays an annual dividend of $1.65 a
share. The company has promised to maintain a constant dividend even
though economic times are tough. How much are you willing to pay for one
share of this stock if you want to earn a 12 percent annual return?
63.
Show Boat Dinner Theatres has paid annual dividends of $0.32, $0.52, and
$0.60 a share over the past three years, respectively. The company now
predicts that it will maintain a constant dividend since its business has
leveled off and sales are expected to remain relatively flat. Given the lack of
future growth, you will only buy this stock if you can earn at least a 19
percent rate of return. What is the maximum amount you are willing to pay
for one share of this stock today?
64.
The common stock of Auto Deliveries sells for $28.16 a share. The stock is
expected to pay $1.35 per share next year when the annual dividend is
distributed. The firm has established a pattern of increasing its dividends by
3 percent annually and expects to continue doing so. What is the market
rate of return on this stock?
65.
The current dividend yield on Clayton's Metals common stock is 3.2 percent.
The company just paid a $1.48 annual dividend and announced plans to pay
$1.54 next year. The dividend growth rate is expected to remain constant at
the current level. What is the required rate of return on this stock?
66.
Northern Gas recently paid a $2.80 annual dividend on its common stock.
This dividend increases at an average rate of 3.8 percent per year. The
stock is currently selling for $26.91 a share. What is the market rate of
return?
67.
Denver Shoppes will pay an annual dividend of $1.46 a share next year with
future dividends increasing by 4.2 percent annually. What is the market rate
of return if the stock is currently selling for $42.10 a share?
68.
Great Lakes Health Care common stock offers an expected total return of
9.2 percent. The last annual dividend was $2.10 a share. Dividends increase
at a constant 2.6 percent per year. What is the dividend yield?
69.
Electronics, Inc. common stock returned a nifty 23.5 percent rate of return
last year. The dividend amount was $0.25 a share which equated to a
dividend yield of 0.95 percent. What was the rate of price appreciation for
the year?
70.
Roy's Welding Supplies common stock sells for $38 a share and pays an
annual dividend that increases by 3 percent annually. The market rate of
return on this stock is 8.20 percent. What is the amount of the last dividend
paid?
71.
Douglass Gardens pays an annual dividend that is expected to increase by
3.6 percent per year. The stock commands a market rate of return of 12.6
percent and sells for $28.50 a share. What is the expected amount of the
next dividend?
72.
Atlas Mines has adopted a policy of increasing the annual dividend on its
common stock at a constant rate of 2.75 percent annually. The firm just
paid an annual dividend of $1.67. What will the dividend be six years from
now?
73.
A stock pays a constant annual dividend and sells for $56.10 a share. If the
market rate of return on this stock is 12.5 percent, what is the amount of
the next annual dividend?
74.
You want to purchase some shares of Green World stock but need a 15
percent rate of return to compensate for the perceived risk of such
ownership. What is the maximum you are willing to spend per share to buy
this stock if the company pays a constant $0.90 annual dividend per share?
75.
Home Canning Products common stock sells for $41.00 a share and has a
market rate of return of 12.8 percent. The company just paid an annual
dividend of $1.15 per share. What is the dividend growth rate?
76.
Winter Time Adventures is going to pay an annual dividend of $2.86 a share
on its common stock next year. This year, the company paid a dividend of
$2.75 a share. The company adheres to a constant rate of growth dividend
policy. What will one share of this common stock be worth five years from
now if the applicable discount rate is 11.7 percent?
77.
Hightower Pharmacy just paid a $3.10 annual dividend. The company has a
policy of increasing the dividend by 4.2 percent annually. You would like to
purchase 100 shares of stock in this firm but realize that you will not have
the funds to do so for another four years. If you require a 16 percent rate of
return, how much will you be willing to pay per share for the 100 shares
when you can afford to make this investment?
78.
National Warehousing just announced it is increasing its annual dividend to
$1.18 next year and establishing a policy whereby the dividend will increase
by 3.25 percent annually thereafter. How much will one share of this stock
be worth 8 years from now if the required rate of return is 9.5 percent?
79.
Shares of Hot Donuts common stock are currently selling for $32.35. The
last annual dividend paid was $1.25 per share and the market rate of return
is 10.7 percent. At what rate is the dividend growing?
80.
Combined Communications is a new firm in a rapidly growing industry. The
company is planning on increasing its annual dividend by 15 percent a year
for the next 4 years and then decreasing the growth rate to 3.5 percent per
year. The company just paid its annual dividend in the amount of $0.20 per
share. What is the current value of one share of this stock if the required
rate of return is 15.5 percent?
81.
KL Airlines paid an annual dividend of $1.18 a share last month. The
company is planning on paying $1.50, $1.75, and $1.80 a share over the next
3 years, respectively. After that, the dividend will be constant at $1.50 per
share per year. What is the market price of this stock if the market rate of
return is 10.5 percent?
