1)Judy is thinking of investing in the stock of Westside Inc. (WSI). She expects WSI to pay a $6 dividend in year one, $

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answerhappygod
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1)Judy is thinking of investing in the stock of Westside Inc. (WSI). She expects WSI to pay a $6 dividend in year one, $

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1)Judy is thinking of investing in the stock of Westside Inc.
(WSI). She expects WSI to pay a $6 dividend in year one, $9 in year
two and $12.20 in year three. Additionally, she plans to sell the
stock for $44.80 in three years’ time. If her required rate of
return is 12%, calculate the value of WSI’s common stock today.
2) Company A expects to pay its
shareholders common shares, dividend $0.25 per share this year. The
investor forecasted the company’s share will close at $30 per
share. If the required rate of return is 10%, what is the value of
the shares?
3) Assume XYZ company earned a $2.50
a share last year & paid a dividend of $1.10 per share at the
end of the year. Price of share at the end of the year is estimated
at $22. Determine the value of the share at the end of the year if
the required rate of return is 14%? If the market price is $22,
would you buy stocks from this company?
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