# FINANCE

posted by Teresa

General Cereal common stock dividends was \$0.79 in 2000 and the last dividend paid was \$1.55 per share in 2010. Dividends are expected to continue growing at the historic rate for the foreseeable future.

What is the General Cereal’s current value of a share of this stock to an investor who requires a 12 percent rate of return ?(5)

1. Ms. Sue

What is the current share price of General Cereal?

However, it's highly unlikely that it will provide a 12% annual return.

2. Teresa

MS. SUE, THE CURRENT SHARE PRICE WAS NOT GIVEN!

3. Ms. Sue

The rate of return is based on the price the shareholder pays for the stock.

Please check with your teacher to see what is expected.

## Similar Questions

1. ### Finance (common stock)

I need a formula for: A share of common stock of xyz ltd is expected to pay no dividends until next 2 years but at the end of year 2 it will pay \$2 as dividends. Dividends are expected to grow at 4% per annum into indefinite future. …
2. ### Finance (common stock)

I need a formula for: A share of common stock of xyz ltd is expected to pay no dividends until next 2 years but at the end of year 2 it will pay \$2 as dividends. Dividends are expected to grow at 20% per annum in yrs 3 and 4 and thereafter …
3. ### Finance

Kilsheimer Company just paid a dividend of \$ 4 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12 %?
4. ### finance

If general cereal common stock dividend was 0.79 in 2000 and the last dividend paid was 1.55 in 2010, what is the annual growth rate.
5. ### Principles of Finance

Kilsheimer Company just paid a dividend of \$ 4 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12 %?
6. ### Finance

Th e Seneca Maintenance Company currently (that is, as of year 0) pays a common stock dividend of \$1.50 per share. Dividends are expected to grow at a rate of 11 percent per year for the next four years and then to continue growing …
7. ### Finance

The Seneca Maintenance Company currently (that is, as of year 0) pays a common stock dividend of \$1.50 per share. Dividends are expected to grow at a rate of 11 percent per year for the next 4 years and then to continue growing thereafter …
8. ### Finance

MMK Cos. normally pays an annual dividend. The last such dividend paid was \$2.3, all future dividends are expect to grow at a rate of 6 percent per year, and the firm faces a required rate of return on equity of 18 percent. If the …
9. ### Finance

To finanance a purchase a company will sell 10 year bonds paying 6.6% per year at the market price of \$1062. Preferred stock paying a \$2.05 dividend can be sold for 25.93. Common stock is cirrently seeling for 54.29 per share and the …
10. ### 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 …

More Similar Questions