# Finance

Faulkner Corporation expects to pay an end-of-year dividend, D1, of \$1.50 per share. For the next two years the dividend is expected to grow by 25 percent per year, after which time the dividend is expected to grow at a constant rate of 7 percent per year. The stock has a required rate of return of 12 percent. Assuming that the stock is fairly valued, what is the price of the stock today?

a. \$46.00
b. \$40.20
c. \$37.97
d. \$36.38
e. \$45.03

1. 👍 0
2. 👎 0
3. 👁 110
1. yep b fo sure answer is aprox= 40.234944

1. 👍 0
2. 👎 0
posted by steve

## Similar Questions

A corporation will pay an annual dividend of \$0.65 one year from now. Analyst expects this dividend to grown 12.9% per year thereafter until the fifth year. After then, growth will level off at 1.9% per year. According to the

asked by Naomi on December 19, 2012
2. ### Accounting

Can someone please tell me how to set this up? I tried doing (45+1.50 - 47) x 150 but I don't think this is right. thank you An investor in a Corporation. On January 1, Year One, purchased 150 shares of the corporation’s capital

asked by Erin on January 11, 2015
3. ### finance

The Blinkelman Corporation has just announced that it plans to introduce a new solar panel that will greatly reduce the cost of solar energy. As a result, analys now expect the company’s earnings, currently (year 0) \$1 per share

asked by Dora on September 10, 2011
4. ### finance

The Blinkelman Corporation has just announced that it plans to introduce a new solar panel that will greatly reduce the cost of solar energy. As a result, analys now expect the companyâ€™s earnings, currently (year 0) \$1 per

asked by midline on September 8, 2013
5. ### Accounting

At the market close on February 19, 2010, McDonald's Corporation had a closing stock price of \$64.74. In addition, McDonald's Corporation had a dividend per share of \$2.05 over the previous year. Determine McDonald's Corporation's

asked by TS on June 8, 2013
6. ### Finance

Hetfield and Ulrich, Inc., has an odd dividend policy. The company has just paid a dividend of \$7 per share and has announced that it will increase the dividend by \$5 per share for each of the next 4 years, and then never pay

asked by T on April 29, 2012

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of \$11.25 per share and has announced that it will increase the dividend by \$9.25 per share for each of the next four years, and then never pay

asked by james on June 25, 2012
8. ### non-constant dividends

I have no idea where to begin with this one ! Nonconstant Dividends Hetfield and Ulrich, Inc., has an odd dividend policy. The company has just paid a dividend of \$12 per share and has announced that it will increase the dividend

asked by Kurt on June 28, 2009
9. ### Finance

Bread, Inc., has an odd dividend policy. The company has just paid a dividend of \$6 per share and has announced that it will increase the dividend by \$4 per share for each of the next five years, and then never pay another

asked by Erika on July 30, 2010
10. ### Fiance applications

A stock’s 2009 Earnings-per-share is \$4.50. Its Payout Ratio is 30%. Next year in 2010 it expects its Earnings-per-share to be \$4.75. Answer the following two questions please, and select the correct choice: 1. What is the

asked by Suzie on March 14, 2010

More Similar Questions