Paying dividends-what is the current share price

Assignment Help Financial Management
Reference no: EM13929596

Estes Park Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 13 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM13929596

Questions Cloud

Implied by the two outstanding debt issues : Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $72, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate..
What is drucker saying with this quote : What is Drucker saying with this quote? Do you agree or disagree? Does business really have other societal obligations besides making a profit?
The growth rate in dividends-current share price : Bayou Okra Farms just paid a dividend of $3.65 on its stock. The growth rate in dividends is expected to be a constant 7 percent per year indefinitely. Investors require a return of 15 percent for the first three years, a return of 13 percent for the..
How did those events impact the handling of later disasters : How did those events impact the handling of later disasters? For example, would you say Hurricane Sandy was handled differently or more successfully based on lessons learned from Katrina
Paying dividends-what is the current share price : Estes Park Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 13 percent, what is the current share pr..
Decided to sell a new line of golf clubs : McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $500 per set and have a variable cost of $200 per set. The company has spent $122,000 for a marketing study that determined the company will sell 56,000 sets per year ..
Analyze influence of innovation leaders organization culture : Assess the application of behaviors that leaders use to create innovative organizations. Analyze the influence of innovation leaders in an organization's culture and processes.
Consider project to supply detroit : Consider a project to supply Detroit with 40,000 tons of machine screws annually for automobile production. You will need an initial $1,440,000 investment in threading equipment to get the project started; the project will last for 7 years. The estim..
The annual standard deviation of returns on stock : The annual standard deviation of returns on Stock A's equity is 31% and the correlation coefficient of these returns, with those on the market index is 0.82. Comparable numbers of stock B are 34% and 0.64. Assume the standard deviation for the market..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the standard deviation of these returns

A stock had returns of 6 percent, -4 percent, 4 percent, and 16 percent over the past four years. What is the standard deviation of these returns?

  What are two criteria needed to use constant growth model

Last Year's Dividend (Do) $9.00 Constant Dividend growth rate 3% Required Rate of Return 11%. What are the two criteria needed to use the Constant Growth Model?

  Airbus sold an a400 aircraft to delta airlines a us company

airbus sold an a400 aircraft to delta airlines a u.s. company and billed 30 million payable in six months. airbus is

  What is the expected rate of return on the overall portfolio

Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 33%. The T-bill rate is 7%. Stock A 30 % Stock B 35 % Stock C 35 % A client prefers to invest in your portfolio a proportion (y) that maximize..

  Todds Dilemma-Common Stocks-Mutual Funds or ETFs

Todd O’Hanlon has worked in the management services division of Focus Consultants for the past five years. He currently earns an annual salary of about $120,000. At 33, he’s still a bachelor and has accumulated about $100,000 in savings over the past..

  What is the yield to maturity for three-year coupon bond

Suppose you observe a 1-year zero-coupon Treasury security trading at a yield to maturity of 5%. You also have a 2-year T-note with a 6% coupon trading at a yield to maturity of 5.5%. And, finally, you observe a risk-free 3-year annuity with an annui..

  Investment banking has changed dramatically

Investment banking has changed dramatically. Some key players either went bankrupt or were bought out. The remaining two investment banks had to apply to become bank holding companies. However, the industry experienced something of a comeback. Goldma..

  Cost of new outside equity capital

The cost of retained earnings is less than the cost of new outside equity capital. Consequently, it is totally irrational for a firm to sell a new issue of stock and to pay cash dividends during the same year. Discuss the meaning of those statements.

  Why is the quantity factor for tray costing

Why is the quantity factor for tray costing >1.0 for >20 trays? Trays are expensive no matter how many you buy. Custom trays cost more when you only order a few of them

  What is the payback period for the project

Suppose Palmer Properties is considering investing $2.6 million today (i.e., C0 = -2,600,000) on a new project that is expected to last for 7 years. What is the payback period for the project? Show your work. What is the net present value of the proj..

  About the average accounting return

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $13 million, which will be depreciated straight-line to zero over its four-year life.

  Discuss the following topic should speculators use currency

discuss the following topic should speculators use currency futures or options? many multinational firms use currency

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