Pay dividend-maintain constant growth rate

Assignment Help Financial Management

Reference no: EM131012394

Alexander Corp. will pay a dividend of $3.30 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever.

Requirement 1: If you want a return of 18 percent, how much will you pay for the stock?

Requirement 2: If you want a return of 12 percent, how much will you pay for the stock?

Reference no: EM131012394

Questions Cloud

What is the present value of the bonds all coupon payments : Jane just purchased bonds with a $1,000,000 total par value and a coupon rate of 5%. If the bond has a maturity of 10 years, pays semi-annual coupons, and the current yield to maturity is 6%, what is the current market value of the bonds? What is the..

Proposed cost-saving device has an installed cost : A proposed cost-saving device has an installed cost of $820,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes.

How much was each semi-annual withdrawal in year : Parents deposit $6,000 into a savings account at the end of each year for 22 years to help their child pay for college. The savings account pays 6% interest per year, compounded monthly. The child withdrawals an equal sum twice per year while in coll..

Conduct research on different types of errors : Conduct research on different types of errors that might occur in Excel and how to prevent/correct them - conduct research on the Internet on how to clear a conditional format from a worksheet cell.

Pay dividend-maintain constant growth rate : Alexander Corp. will pay a dividend of $3.30 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever. If you want a return of 18 percent, how much will you pay for the stock?

Create a case study of a client who has likely experienced : For this Discussion, create a case study of a client who has likely experienced one of the perceptual errors you learned about in this unit

What was the times interest earned ratio : For the most recent year, Seether, Inc., had sales of $437,000, cost of goods sold of $219,400, depreciation expense of $59,100, and additions to retained earnings of $51,300. The firm currently has 22,000 shares of common stock outstanding, and the ..

What is the most common type of geothermal plant : Geothermal resources are divided into six categories. What are they and analyze them with pros/cons - what is the most common type of geothermal plant? Describe the principle behind Binary geothermal power plant.

Prepare an installment payments schedule : Show how the total mortgage liability should be reported on the balance sheet at December 31, 2014. ( Talkington Electronics balance sheet December 31 2014 )

User Account

All Pages