Calculating fair value of stocks
dividends are expected to grow at a rate of 6%. What is the current value of a
share of this stock to an investor who requires a 10 percent rate of return?
2.) What is the current per-share value of JRM Corporation
to an investor who requires a 10 percent annual rate of return, if JRM’s
current per-share dividend is $3 and expected to remain at $3 for the
foreseeable future?
3.) A company is expected to pay dividends of $4.50, $4.50
and $5.50 over the next three years. The stock is expected to have a value of
$50.00 three years from today. If the risk-free rate is 5%., the market risk
premium 14% and Pure has a beta of 1.14, what is the current value of Pure?
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