Market expectation of firm constant future growth rate

Assignment Help Financial Management
Reference no: EM131068488

A firm's stock currently sells for $57.27. The firm just paid a dividend $4.68. If the required rate of return on the firm's stock is 13.9%. what is the market's expectation of the firm's constant future growth rate? State the answer as a percentage to 2 decimal places.

Reference no: EM131068488

Questions Cloud

How many strands will be required to make the pre-stressing : how many strands will be required to make the pre-stressing cable.
Estimate of the yearly cost difference : Is it a good idea to switch from 20 to 30 weeks? Make an estimate of the yearly cost difference
Affirmative action programs are misguided : Do you think affirmative action programs are misguided, or are they justifiable and socially beneficial? Which side of the comparable-worth issue are you on?
Explain how different countries differ widely : The author tries to explain how different countries differ widely when it comes to accounting systems because they have rules which differ from one country to the other and this brings the whole difference.
Market expectation of firm constant future growth rate : A firm's stock currently sells for $57.27. The firm just paid a dividend $4.68. If the required rate of return on the firm's stock is 13.9%. what is the market's expectation of the firm's constant future growth rate?
What ways is it a competitive advantage : Do you think it matters on how big or small an organization is for it to be a competitive advantage?
Commercial substance by trading in a similar press : I need to help to check my answer, i have inculded all info need. thank you (ex 10-25) A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying c..
Prepare memo to mr jones that discusses legal implications : Prepare a memo to Mr. Jones that discusses the legal and tax implications of making the change. Be sure to cite your findings with appropriate laws and tax code.
Generic strategies of porters : Companys competitive advantage over its rivals - is company following any Generic Strategies of Porters.

Reviews

Write a Review

 

Financial Management Questions & Answers

  Four different bond rating categories

The yield to maturity for 15-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

  What is the cost assigned to the equipment

Land, buildings and equipment are acquired for a lump sum of $875,000. The market values of the three assets are, respectively, $200,000, $500,000 and $300,000. What is the cost assigned to the equipment?

  What is the bonds yield to maturity and current yield

A 20-year, 10 percent semiannual coupon bond, with a par value of $1,000 sells for $1,200 (assume that the bond has just been issued today). What is the bond's yield to maturity? What is the bond's current yield?

  Calculate the rate of return for each these investments

You’re trying to choose between two different investments, both of which have up-front costs of $100,000. Investment G returns $165,000 in 9 years. Investment H returns $285,000 in 16 years. Calculate the rate of return for each these investments.

  What is the equilibrium expected growth rate

Gay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever..

  Zero-coupon bonds-when the bonds are first sold

Jia Hua Enterprises wants to issue sixty 20-year, $1,000 par value, zero-coupon bonds. If each bond is priced to yield 7 percent, how much will Jia Hua receive (ignoring issuance costs) when the bonds are first sold?

  What is the companys required return

CAPM Required Return A company has a beta of .69. If the market return is expected to be 13.9 percent and the risk-free rate is 5.95 percent, what is the company's required return?

  What is the payback period and net present value

A 3-year project project with an initial cost of $2,704 promises the following cash flows for years 1 through 3, respectively: $1,653, $1,501, $1,495. If you require a 5.8 percent rate of return on this project, what is the net present value? A proje..

  Discount for the yen versus the dollar

Calculate the one-, three-, and six-month forward premium or discount for the Japanese yen versus the U.S. dollar using the following American term quotations. For simplicity, assume each month has 30 days. What is the interpretation of your results?

  Financial institution is planning to give a loan

The assignment may be submitted as an Excel spreadsheet or an electronic (Word or PDF) document. A financial institution is planning to give a loan of $5 million to a firm. It expects to charge an up-front fee of 0.20% and a service fee of 5 basis po..

  Assume the forward price satisfies no-arbitrage pricing

What portfolio of options and risk-free asset (if any) can be used to replicate the payoffs of a forward contract on IBM stock with 9 months to maturity? Assume the forward price satisfies no-arbitrage pricing. IBM stock currently trades for $90/shar..

  Issue of bonds with a maturity

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semi annual interest payments. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 6..

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