I need to calculate the following:
a. If you expect the dividend in one year to be $2.25, and you expect it to grow at a constant rate each year of 5%, what do you believe the stock is worth, assuming your RoR on the stock is 15.5%?
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b. Mtech Corp. investors expect Mtech to begin paying dividends, with the first dividend of $2 coming one year from today, and the company should grow at a constant rate of 8% per year. If the rate of return is 15%, what is the value of the stock today?
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c. Mtech Corp. is expanding rapidly, and it currently needs to retain all of its earnings; hence, it does not pay any dividends. However, investors expect Mtech to begin paying dividends, with the first dividend of $2 coming three years from today. The company should grow at a constant rate of 8% per year. If the rate of return is 15%, what is the value of the stock today?
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d. Mtech Corp. is expanding rapidly, and it currently needs to retain all of its earnings; hence, it does not pay any dividends. However, investors expect Mtech to begin paying dividends, with the first dividend of $2 coming in one year. The dividend should grow rapidly—at a rate of 50% per year—during Years 2 and 3. After Year 3, the company should grow at a constant rate of 8% per year. If the rate of return is 15%, what is the value of the stock today?
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e. Mtech Corp. is expanding rapidly, and it currently needs to retain all of its earnings; hence, it does not pay any dividends. However, investors expect Mtech to begin paying dividends, with the first dividend of $2 coming three years from today. The dividend should grow rapidly—at a rate of 50% per year—during Years 4 and 5. After Year 5, the company should grow at a constant rate of 8% per year. If the rate of return is 15%, what is the value of the stock today?
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f. You expect your company to pay the following dividend pattern for three years as follows: D1 = $1; D2 = $2; D3 = $3. After three years, the dividends are expected to grow at a constant rate of 6% per year. If the required rate of return demanded by investors is 15%, what is the current price of your company’s stock?