Thress Industries just paid a dividend of $1.00 a share (i.e., D0 = $1.00). The

Question

Thress Industries just paid a dividend of $1.00 a share (i.e., D0 = $1.00). The dividend is expected to grow 6% a year for the next 3 years and then 13% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to the nearest cent.

D1 = $  

D2 = $  

D3 = $  

D4 = $  

D5 = $  

Boehm Incorporated is expected to pay a $3.90 per share dividend at the end of this year (i.e., D1 = $3.90). The dividend is expected to grow at a constant rate of 9% a year. The required rate of return on the stock, rs, is 16%. What is the value per share of Boehm's stock? Round your answer to the nearest cent.

Explanation / Answer

Ans.

D1= 1*1.06 = $1.06

D2 = 1.06*1.06 = $1.1236

D3= 1.1236*1.06 = $1.191016

D4 = 1.191016*1.13 = $1.34584808

D5 = 1.34584808*1.13 = $1.52080833

Value of Boehm

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