Finance. PLEASE HELP ME
posted by Heidi .
1) growth rates
The stock price of the company is $76
investors require a 14% rate of return on similar stocks
If the company plans to pay a dividend of $5.00 next year
the expected growth rate of the company's stock price is ______ percent
2) non constant dividends
A company has just paid a dividend of $13.00 per share.
They will increase the dividend by $6.00 per share for each of the next three years and then never pay another dividend. If you require a 15% return on the company's stock, you will pay $ _________ per share today

Finance. PLEASE HELP ME 
economyst
First, Finance is not my area.
That said, I would think that if someone expects a 14% rate of return, either in dividends or price per share, then 1.14*76 = 86.64 with no dividends and 86.645. = 81.64 with a $5 dividend. The growth rate = 1 81.64/76 = 7.4%
2) assuming that there is no expected growth in the stock price, and I expect to sell after the 3rd dividend payment. Dividends 1,2, and 3 years from now are 19, 25, and 31. Deflate each of these by 15% per year. X=15/1.15 + 25/(1.15^2) + 31/(1.15)^3 = 55.81
Respond to this Question
Similar Questions

Finance questions
1) growth rates The stock price of the company is $76 investors require a 14% rate of return on similar stocks If the company plans to pay a dividend of $5.00 next year the expected growth rate of the company's stock price is ______ … 
Accounting
If a company pays $4.90 dividend at the end of the year, and the stock price is $80, and the growth rate is 6%. How could you increase the dividend yield? 
math
If a company pays $4.90 dividend at the end of the year, and the stock price is $80, and the growth rate is 6%. How could you increase the dividend yield? 
Prin Finance
Your company pays a dividend of $2.35 per share and expects no growth in this dividend at all, it will remain at this level indefinitely in management’s opinion. Theoretically what will this stock’s price be today if investors … 
Finance
Hooks Athletics, Inc., has outstanding a preferred stock with a par value of $30 that pays a dividend of $2.50. The preferred stock is redeemable at the option of the stockholder in 10 years at a price equal to $30. The stock may be … 
Finance
The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.25, the market risk premium is 5.00%, and the riskfree rate … 
Finance
Teddy Company paid a $3.50 dividend this year (D0 = $3.50). Next year the company expects to pay a $4.00 dividend (D1 = $4.00). The stock's dividend is expected to grow at a rate of 15 percent a year until three years from now (t = … 
Finance
The stock price of Webber Co. is $68. Investors require an 11 percent rate of return on similar stocks. Required: If the company plans to pay a dividend of $3.85 next year, what growth rate is expected for the company’s stock price? 
Finance
Universal Laser, Inc., just paid a dividend of $3.30 on its stock. The growth rate in dividends is expected to be a constant 6 percent per year, indefinitely. Investors require a return of 15 percent on the stock for the first three … 
finance
Stock A is expected to provide a dividend of $10 per share forever. Stock B is expected to pay a dividend of $5 next year, after which dividends are expected to grow forever at 5.4%. finally, stock C is expected to pay a dividend of …