Consolidated Software does not currently pay any dividends but is expected to start doing so in four years. That is, Consolidated will go for three more years without paying any dividends and then is expected to pay its first dividend ($1) at the end of the 4th year. Once the company starts paying dividends, it is expected to continue to do so. The company is expected to have a dividend payout ratio of 60% and to maintain a return on equity of 20%. Based on the Dividend Discount Model, and given a required rate of return of 12%, what is the maximum price you should be willing to pay for this stock today?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Consolidated Software does not currently pay any dividends but is expected to start doing so in four years. That is, Consolidated will go ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $5.0 million. The machinery can be sold to the Romulans today for $7.2 million. Klingon's current balance sheet shows net fixed assets of $3.
Answers (1)
S Company reported net income for 2018 in the amount of $400,000. The company's financial statements also included the following: Increase in accounts receivable $ 80,000 Decrease in inventory 60,000 Increase in accounts payable 200,000 Depreciation
Answers (1)
Using the vendor that all Camp Bow Wow franchises use, which gives a volume discount, purchase additional ramps, tunnels, and pools that customers have said their dogs would enjoy. a. More Efficient b. More Effective c. High Performance
Answers (1)
What differences in the retail environment may justify the fact that the fast-moving consumer goods supply chain in India has far more distributors than it has in the United States?
Answers (1)
You're optimizing a client's Shopping campaign to drive online sales and are assessing the company's website. You determine that the site needs to be improved for mobile, and recommend that the company:
Answers (1)
New Questions in Business
What effect does the availability of many substitutes have on the elasticity of demand for a good?
Answers (1)
What strategies do companies use for their financial benefit
Answers (1)
1. On March 1, a business paid $3,600 for a twelve month liability insurance policy. On April 1 the same business entered into a two-year rental contract for equipment at a total cost of $18,000.
Answers (1)
Hubert is a veteran of the First Gulf War. What could be a reason for him to seek a VA loan?
Answers (1)
A complex product development process, including an extensive business analysis to determine the possibility of success, are hallmarks of aa) genuinely new product. b) radically new product. c) new product failure. d) controlled new product.
Answers (1)