Dividends are expected to grow

Assignment Help Financial Management

Reference no: EM131346495

Slap Engineering Inc. is growing quickly. Dividends are expected to grow at 20% rate for the next 3 years, with the growth rate falling to a constant 4% thereafter. The required return is 11% and the company just paid a $2.00 annual dividend. The current share price is $44.57 - now show your work how you arrive at this figure:

Reference no: EM131346495

Questions Cloud

Decrease additional funds needed from external sources : Which of the following will decrease the additional funds needed from external sources? Internal Growth Rate Leash N Collar reported a profit margin of 8.4%, total asset turnover ratio of 1.9 times, debt-to-equity ratio of 0.79 times, net income of $..

Solving for rates what annual rate of return is earned : Moving Cash Flows What is the value in year 5 of a $2,500 cash flow made in year 8 when interest rates are 11.6 percent? Solving for Rates What annual rate of return is earned on a $2,100 investment when it grows to $4,700 in nineteen years?

Interest rate for individual securities : Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securities is 8.00 percent, and the 6-year Treasury rate is 8.20 percent. Further, you expect that real interest rates will be 4...

Net present value of both new purchase and lease option : Proust Manufacturing Co. produces personal fitness machines. The once successful line is no longer selling well, so the company is considering production of a new improved cardio-vascular machine. Calculate the net present value of both the new purch..

Dividends are expected to grow : Slap Engineering Inc. is growing quickly. Dividends are expected to grow at 20% rate for the next 3 years, with the growth rate falling to a constant 4% thereafter. The required return is 11% and the company just paid a $2.00 annual dividend. The cur..

The firm is under-valued or over-valued : Under/Over Valued Stock A manager believes his firm will earn a 16.2 percent return next year. His firm has a beta of 1.52, the expected return on the market is 14.2 percent, and the risk-free rate is 4.2 percent. Compute the return the firm should e..

Compute the revenue-sales price and sales volume : Assume that Casio Computer Company, LTD. sells handheld communication devices for $110 during August as a back-to-school special. The normal selling price is $160. The standard variable cost for each device is $60. Compute the revenue, sales price, s..

Bank charging video for underwriting the stock issue : Calculating Costs of Issuing Stock Video Games, Inc., with the help of its investment bank recently issued 10.17 million shares of new stock. The offer price on the stock was $48.35 per share and Video's received a total of $463,500,000 through this ..

What will be the standard deviation in EPS : Your company doesn't face any taxes and has $750 million in assets, currently financed entirely with equity. Equity is worth $50.00 per share, and book value of equity is equal to market value of equity. The firm is considering switching to a 30-perc..

User Account

All Pages