Begin paying annual dividends

Assignment Help Financial Management
Reference no: EM131055365

1. Orca, Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $1.85 a share. The following dividends will be $1.5, $1.45, and $2.53 a share annually for the following three years, respectively. After that, dividends are projected to increase by 4.2 percent per year. How much are you willing to pay today to buy one share of this stock if your required rate of return is 12.6 percent?

2. You anticipate that XSensors Co. will pay a constant dividend of $2.75 each year for the next 10 years. After that, the dividend will increase to $4.89 and hold steady for another 10 years. After that, you expect the dividend will start increasing every year at a constant rate of 2.6 percent per year, forever. Your discount rate for this stock is 13.3 percent. How much are you willing to pay for this stock today?

Reference no: EM131055365

Questions Cloud

Emphasizing their strengths weaknesses : Research five companies/organizations' websites on how they recruit individuals into their companies/organizations. Rate them from highest to lowest and explain why you rated them that way emphasizing their strengths and weaknesses.
What the firm is doing in the area of corporate citizenship : Which Baldrige criterion requires the applicant to outline what his or her firm is doing in the area of corporate citizenship? Which of the following is not one of the support activities in the value chain?
Dorothy deeded an acre of real estate : 1. Dorothy deeded an acre of real estate that she owns to George for the life of Benny and then to Ernie. Describe the property interests of George, Benny, Ernie, and Dorothy.
What is the market structure that the firm operates : Illustrate and explain with the market demand and supply curve the expected impact of a change in government policy on the chosen firm/industry. For the firm chosen, what is the market structure that the firm operates in? Why?hint: based on charac..
Begin paying annual dividends : Orca, Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $1.85 a share. The following dividends will be $1.5, $1.45, and $2.53 a share annually for the following three years, re..
Discuss the role of project steering and review committees : Discuss each of the different types of organizational change. Name and discuss four project manager's objectives. Discuss the role of the Project Steering and Review Committees.
Research design regarding solving of business problem : What are three considerations when choosing a research design regarding the solving of a business problem? How would you decide to choose one research design over another to best serve the analysis and solution of the problem?
Would minimize components of interest rate risk : Assuming you have no intention of using your money for anything other than that purpose, what would be the approximate maturity of bonds that would minimize components of interest rate risk?
How it aligns to the organization''s mission : What differences do you detect in the international version of the ad? How did the underlying aspects of marketing and psychology utilized in the advertisement change?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Describe the concept of incremental cash flows

Eureka Bottling Company was established in 1992 by Josie Smith. The company was extremely successful at the beginning of the 21st century, but sales have waned since then. In an attempt to rejuvinate EBC's sales, Ms. Calculate the weighted average co..

  Which customers to pursue-which products or services

Companies want to make the best marketing decisions possible regarding which customers to pursue, which products or services to introduce or promote, where to sell their products or services, and at what price. Although not perfect, the use of market..

  Each mix should company prepare for the maximum revenue

A candy company has 111kg of chocolate- covered nuts and 69kg of chocolate- covered raisins to be sold as two different mixs. One mix will contain half nuts and half raisins and will sell for $7 per kg. The other mix contain 3/4 nuts and 1/4 raisins ..

  How much will you pay for the stock

The Sleeping Flower Co. has earnings of $1.75 per share. If the benchmark PE for the company is 18, how much will you pay for the stock? and If the benchmark PE for the company is 21, how much will you pay for the stock?

  How much will you have if you make deposits

You deposit $1,400 at the end of each year into an account paying 8.6 percent interest. Required: (a) How much money will you have in the account in 19 years? (b) How much will you have if you make deposits for 38 years?

  Paper on future generation telecommunication technology

paper on future generation telecommunication technology technology that is extending the functionality and lowering the

  Identified an investment project with the cash flows

ABC Co. has identified an investment project with the following cash flows. if the discount rate is 6 percent, what is the future value of these cash flows in 4 year? what is the future value at discount rate of 8 percent? at 16 percent?

  Values for a lump sum assuming annual compounding

Find the following values for a lump sum assuming annual compounding: The future value of $500 invested at 8 percent for one year The future value of $500 invested at 8 percent for five years The present value of $500 to be received in one year when ..

  Positive or negative numbers as they affect cash flow

The following are account balances (in thousands) at December 31, 2OX1, for Sharon Hill Hospital. Prepare a statement of cash flows for the year ended December 31, 2OX1. (Hint: the amounts have been stated as positive or negative numbers as they affe..

  What is the effective semiannual return-quarterly return

You are looking at an investment that has an effective annual rate of 14.3 percent. What is the effective semiannual return? What is the effective quarterly return? What is the effective monthly return?

  Company cost of preferred stock for use in calculating wacc

How much would $5,000 due in 25 years be worth today if the discount rate were 5.0%? Bosio Inc.'s perpetual preferred stock sells for $97.50 per share and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would i..

  Remaining divisions have to contribute every month

Merritt Manufacturing needs to accumulate $15 million to retire a bond issue that matures in 12 years. The firm's manufacturing division can contribute 100,000$ per quarter to an account that will pay 2% quarterly. How much will the remaining divisio..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd