# Future dividend payments | Business & Finance homework help

Don't use plagiarized sources. Get Your Assignment on
Future dividend payments | Business & Finance homework help
Just from \$13/Page

2.Calculate the growth rate of Asset J dividends, we have to assume that future dividend payments will grow at a constant rate into the future forever. This constant rate can be estimated by calculating the average growth rate from the past dividends. Calculate Asset J’s dividend growth rate for the past 8 years.

 Year 1 2 3 4 5 6 7 8 Dividend \$0.86 \$2.00

Let:

Dj = \$ .86,

D8 = \$2.00,

n = 8.

The equation for calculating the growth rate of dividends is the future value equation. FV=PV(1+i)n

where:

Dj = PV,

D8 = FV,

n = time

Growth Rate = I

Calculate the growth rate: Remember you have to change the Future Value Equation to find N or use your calculator.

3.Calculate Assets J’s theoretical value of the common stock price. The equation for the Dividend Growth Model is,

V = (Current Dividend * (1 + Dividend Growth))
(Required Return – Dividend Growth)

where:

V = price of the common stock,

Current Dividend = Most recently paid dividend,

Required return on common stock = CAPM

Dividend Growth = Growth Rate of Dividend

4.This time, calculate the growth rate of Asset J dividends over the past five years if the dividend grew by the following:

 Year 1 2 3 4 5 Dividend \$1.42 \$2.00

Let:

D1= \$1.42,

D8= \$2.00,

n = 5.

The equation for calculating the growth rate of dividends is the future value equation. FV=PV(1+i)n

where:

Dj = PV,

D8 = FV,

n = time

Growth Rate = I

5.Use the new growth rate of Asset J’s dividend in question four and calculate the theoretical value of the common stock of Asset J. Assume Asset J’s required return on the common stock (CAPM) remained the same as in question 1. Use the same Dividend Growth Model equation as in question 3 to find the new theoretical value of the common stock of Asset J.

V = (Current Dividend * (1 + Dividend Growth))
(Required Return – Dividend Growth)

6.The required rate of return calculation has an enormous effect on the stock’s price using these types of models. If we assume that Nations Bank’s required rate of return on its common stock (CAPM) is 12% instead of 13%, what would the Constant Dividend Growth Model Price yield?

You need to plug in the dividend growth rates from appropriate results above.

V = (Current Dividend * (1 + Dividend Growth))
(Required Return – Dividend Growth)

8.What are some of the drawbacks using Dividend Growth Model, or any other dividend based pricing model?

Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

At Myhomeworkwriters.com, we always aim at 100% customer satisfaction. As such, we never compromise o the quality of our homework services. Our homework helpers ensure that they craft each paper carefully to match the requirements of the instruction form.

With Myhomeworkwriters.com, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.

Affordable Prices

Our company maintains a fair pricing system for all academic writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.

On-Time delivery

My Homework Writers guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.

100% Originality

Myhomeworkwriters.com maintains a zero-plagiarism policy in all papers. As such, My Homework Writers professional academic writers ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.

Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email: support@myhomeworkwriters.com.

Try it now!

## Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Homework Writing Services

My Homework Writers holds a reputation for being a platform that provides high-quality homework writing services. All you need to do is provide us with all the necessary requirements of the paper and wait for quality results.

## Essay Writing Services

At My Homework Writers, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our homework writing service providers are well-versed with all the aspects of developing high-quality and relevant essays.