Super carpeting inc. (sci) just paid a dividend (d₀) of $2.40 per share, and its annual dividend is expected to grow at a constant rate (g) of 5.00% per year. if the required return (r s ) on sci’s stock is 12.50%, then the intrinsic value of sci’s shares is per share. which of the following statements is true about the constant growth model? the constant growth model can be used if a stock’s expected constant growth rate is more than its required return. the constant growth model can be used if a stock’s expected constant growth rate is less than its required return. use the constant growth model to calculate the appropriate values to complete the following statements about super carpeting inc.: • if sci’s stock is in equilibrium, the current expected dividend yield on the stock will be per share. • sci’s expected stock price one year from today will be per share. • if sci’s stock is in equilibrium, the current expected capital gains yield on sci’s stock will be per share.

Consider the following calculations.

Explanation:

1)

Intrinsic value = D1 / (Required rate - growth rate)

Intrinsic value = (2.4 * 1.05) / 0.125 - 0.05

Intrinsic value = 2.52 / 0.075

Intrinsic value = $33.60

2)

The constant growth model implies that dividends growth rate remains constant from now to infinity.

3)

Current dividend yield = (D1 / current stock price) * 100

Current dividend yield = (2.52 / 33.6) * 100

Current dividend yield = 7.50%

Stock price 1 year from today = Present value (1 + growth rate)

Stock price 1 year from today = 33.6 * (1 + 0.05)

Stock price 1 year from today = $35.28

Capital gains yield = [(Ending value - beginning value) / beginning value] * 100

Capital gains yield = [(35.28 - 33.6) / 33.6] * 100

Capital gains yield = 5.00%

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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