The future earnings, dividends, and common stock price of Ca…

The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 3% per year. Callahan’s common stock currently sells for $32.00 per share, its last dividend was $3.03, and it will pay a $3.12 dividend at the end of the current year. What is the cost of common equity using the DDM approach?

AAPL has just paid an annual dividend of $2 per share. Analy…

AAPL has just paid an annual dividend of $2 per share. Analysts are predicting an 5% growth rate per year for the next 2 years. After two years, AAPL is expected to grow by 2% per year forever. AAPL ‘s cost of equity is 10% per year. What is the price per share of AAPL according to the dividend discount model (multi-stage growth)?

The prevailing cost of capital is 20% (WACC). You are consid…

The prevailing cost of capital is 20% (WACC). You are considering two mutually exclusive projects, A and B. Which one should you take? Project A has the following cash flows: CF0=-$1010, CF1=$480, CF2=$1050. Project B has the following cash flows: CF0=$-1000, CF1=$500, CF2=$1000.