QNT 561 WEEK 6
July 3, 2020Psychology and Education
July 3, 2020
- Write a brief overview concerning stock valuation. Your overview should include:
- A brief explanation of the legal rights and privileges of common stockholders.
- Identification of a formula that applies to the valuation of all stocks.
- An explanation of what constitutes a constant growth stock and how it is valued.
- Complete the following stock value calculations:
- Assume that XYZ is a constant growth company whose last dividend was $2.00 with the dividend expected togrow at 6% indefinitely. Calculate the following:
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- The expected dividends for the next three years
- The current stock price
- The expected value in one year
- The dividend yield, capital gains yield, and total return during the first year
- Now assume that XYZ is expected to grow 30% for the next three years and then grow indefinitely at 6%. Calculate the following:
- The current stock price
- The dividend yield and capital gains yield in the first year
- Now assume that XYZ is a constant negative growthcompany whose last dividend was $2.00 with the dividend expected to grow at -6% indefinitely. Calculate the stock price.
- Wrap up your analysis by explaining why investors would be willing to purchase the stock.