Compute the price of the stock

Assignment Help Finance Basics
Reference no: EM13270415

Sterling Corp. paid a dividend of $.80 last year. Over the next 12 months, the dividend is expected to grow at a rate of 10 percent, which is the constant growth rate for the firm (g). The new dividend after 12 months will represent D1. The required rate of return (Ke) is 14 percent. Compute the price of the stock.

Reference no: EM13270415

Questions Cloud

Find time-average poynting power density beneath the surface : A 100 Hz electromagnetic wave is propagating down into the sea water with an electric feld intensity of |E| = 1 V /m just beneath the sea surface. a. What is |E| at a depth of 100 m b. What is the time-average Poynting power density just beneath t..
Quality of life in professional fire?ghters : What are the research questions? Hypotheses - what theoretical framework did the researcher use
What is the decrease in length : If the column is 2.30m in length before being stressed, what is the decrease in length
Determine what is the penetration depth of a microwave oven : The complex permittivity for bottom round steak is about epsilon = 40(1 - j0.3)*epsilon0(e0) at the operating frequency (2.5 GHz) of a microwave oven. What is the penetration depth
Compute the price of the stock : The new dividend after 12 months will represent D1. The required rate of return (Ke) is 14 percent. Compute the price of the stock.
What is jack weighted average cost of capital : The stock has a beta of 1.5 and sells for $60 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 7 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?
Obtain the induced current in the coil : A 180-turn circular coil has diameter 5.35cm and resistance 1.25?. obtain the induced current in the coil
What is the decay constant of this isotope : A drug prepared for a patient is tagged with 9943Tc, which has a half-life of 6.05 h. What is the decay constant of this isotope
How many years is it until this bond matures : The Lo Sun Corporation offers a 5.8 percent bond with a current market price of $823.50. The yield to maturity is 8.18 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is the project mirr

What is the project's MIRR? What is the project's PI? What is the project's payback period? What is the project's discounted payback period?

  What is the value of this business

Assume that it will take exactly one year to get the first cash flow and each cash flow will occur on the same date ever year. If the current interest rate is 5% per year then what is the value of this business?

  What is the projects free cash flow in year 1

This new project will generate additional sales revenue of $112,000 while additional operating costs, excluding depreciation, will be $68,000. Vandelay' s marginal tax rate is 35%. What is the projects free cash flow in year 1?

  Estimate the new beta

You hold a diversified portfolio consisting of a $5,000 investment in each of 20 different common stocks. The portfolio beta is equal to 1.15.

  Calculate average beta of the new stocks

A mutual fund manager has a 20 million dollar portfolio with a beta of 1.50. The risk-free rate is 4.50 percent, and the market risk premium is 5.50%. The manager expects to receive an additional $5 million which she plans to invest in a number of st..

  Selecting appropriate financial institution

Choose the most appropriate financial institution type for each of the following scenarios. Describe your selection and describe at least the several features of each of your selections.

  Description of dominant strategy

Write down the major ways that the risks of exchange rate changes can be hedged against? What are the ways a multinational corporation can reposition its funds to increase its profits?

  How much of first annual payment will be principal reduction

You take out a $800,000 amortized loan for your new beach house. You will make equal annual payments at the end of each of the next 10 years. The interest rate is 8%. How much of the first annual payment will be principal reduction?

  Describing conversation of value assessments in merger

At a minimum, your memo to Harry must address following items: A conversation of value assessments in mergers.

  Determine the countrys gdp in terms

Assume the GDP increases to 55 billion yen for this year, while the dollar value of one yen is now $0.01. Determine the country's GDP in terms of U.S. dollars for this year.

  Calculate the estimated rates of return

You expect the risk-free rate to be 3% and the market return to be 8 percent. You also have the following data about three stocks.

  What is a fair price for the investment

The required rate of return is 10%. What is a fair price for the investment - assuming the discount rate and expected cash flows don't change - exactly 3 years from today. (In other words, what would the investment sell for in 3 years?

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