# Calculate the expected price of a common stock

Asked Jan 28, 2010, 01:24 PM — 3 Answers
2 7. Calculate the expected price of a common stock with an expected
Dividend of $2.85. The dividend is expected to grow at an annual Rate of 5.25%. An appropriate discount rate is 14.75%. Show all work. 3 Answers  Luckydog179 Posts: 3, Reputation: 1 New Member #2 Jan 28, 2010, 01:25 PM Calculate the expected price of a common stock with an expected Dividend of$2.85. The dividend is expected to grow at an annual
Rate of 5.25%. An appropriate discount rate is 14.75%. Show all work
 ArcSine Posts: 961, Reputation: 523 Senior Member #3 Jan 28, 2010, 04:08 PM
$P_0 \ = \ \frac{D_1}{r-g}$

... where the cast of characters, in order of appearance, are...

the current Price; the Dividend expected one period hence; the appropriate discount rate; and the expected growth rate.
 Luckydog179 Posts: 3, Reputation: 1 New Member #4 Jan 29, 2010, 10:54 AM
Thanks

A company has declared the following annual dividend over a six year period 2003, $21,000. 2004$50,000. 2005 $15,000. 2006$80,000. 2007 $90,000. 2008$140,000. During the entire period the outstanding stock of the company was composed of 10,000. Shares of 4% preferred stock, $75 par, and... Expected return on common and preferred stock [ 2 Answers ] Thurber common stock just paid a$1.76 divided and its current price is $22 per share. The common divided is expected to grow at a constant rate of 5% per year. Thurber preferred stock pays a perpetual$8.98 annual dividend and sells for $98.25. The preferred stock price is expected to remain... A company's common stock has a beta of .8. If the expected risk- free return is 7% and the market offers a premium of 8% over the risk-free rate, what is the expected return of the company's common stock? Sales = 10,000 units Sales Price per unit =$10 Variable Cost per unit = $5 Fixed Costs =$10,000 Bonds Outstanding = 15,000 Kd = on Outstanding Bonds = 8% Tax Rate = 40% Shares of Common Stock Outstanding = 10,000 Beta = 1.4 Krf = 5%