Super Carpeting Inc. (SCI) just paid a dividend (Do) of $1.92 per share, and its annual dividend is expected to grow at a constant rate (g) of 4.00% per year. If the required return (rs) on SCI's stock is 10.00%, then the intrinsic value of SCI's shares is per share. Which of the following statements is true about the constant growth model? The constant growth model implies that dividend growth remains constant from now to infinity. O The constant growth model implies that dividends remain constant from now to a certain terminal year. Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.: • If SCI's stock is in equilibrium, the current expected dividend yield on the stock will be per share. • SCI's expected stock price one year from today will be per share. . If SCI's stock is in equilibrium, the current expected capital gains yield on SCI's stock will be per share.
The constant growth valuation formula has dividends in the numerator. Dividends are divided by the difference between the required return and dividend growth rate as follows: D₁ Po (r₂-8) Which of the following statements is true? O Increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes growth. O Increasing dividends will always decrease the stock price, because the firm is depleting internal funding resources. O Increasing dividends will always increase the stock price. Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $2.25 at the end of the year. Its dividend is expected to grow at a constant rate of 6.50% per year. If Walter's stock currently trades for $20.00 per share, what is the expected rate of return?
Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $2.25 at the end of the year. Its dividend is expected to grow at a constant rate of 6.50% per year. If Walter's stock currently trades for $20.00 per share, what is the expected rate of return? O 734.38% O 660.56% O 1,385.00% O 17.75% Walter's dividend is expected to grow at a constant growth rate of 6.50% per year. What do you expect to happen to Walter's expected dividend yield in the future? O It will decrease. O It will increase. It will stay the same.
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