Shareholders as the annual dividend

Assignment Help Financial Management
Reference no: EM131063583

Michael's, Inc. just paid $2.45 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.30 percent. If you require a rate of return of 9.5 percent, how much are you willing to pay today to purchase one share of Michael's stock?

Reference no: EM131063583

Questions Cloud

Discontinue paying dividends permanently : The Red Bud Co. pays a constant dividend of $2.30 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth tod..
Plot the quantity supplied on the supply line : Suppose that the U.S. government places a ceiling on the price of a medical drug of $7. 1.) Plot the quantity supplied on the supply line and label it.
A responsibility accounting system offers : Question 1 A responsibility accounting system offers all of the following advantages to a business except:
Covered call by buying one share of a stock : An investor writes a covered call by buying one share of a stock at $50 and selling a European call option on the stock with strike price $55 at $1.25. What is his profit if he holds his position until maturity of the option and the stock price is $4..
Shareholders as the annual dividend : Michael's, Inc. just paid $2.45 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.30 percent. If you require a rate of return of 9.5 percent, how much are you willing to pa..
Begin paying annual dividends : NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $0.37 a share. The following dividends will be $0.42, $0.57, and $0.87 a share annually for the following three years, respec..
What ethical issues do you as a tax preparer have to deal : You are preparing a tax return and note that your client received several 1099-Bs, Proceeds from Broker and Barter Exchange Transactions. What ethical issues do you, as a tax preparer, have to deal with?
What is the break even corporate tax rate : Mantle Corp. is considering two equally risky investments: What is the break even corporate tax rate that makes the company indifferent between the two investments?
Certain window components from duwee : Clear's Custom Window division has been purchasing a certain window components from Duwee, Cheatim & Hoe Company. However it was determined that it can use one of the frames from the Framing division.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the current value of this preferred stock

North Pole Cruise Lines issued preferred stock many years ago. It carries a fixed dividend of $9 per share. With the passage of time, yields have gone down from the original 10% to 8%. What was the original issue price? What is the current value of t..

  Assume that you are the assistant to the cfo of xyz

assume that you are the assistant to the cfo of xyz company.nbsp your task is to estimate xyzs wacc using the following

  Uses straight line depreciation of the purchase price

he Los Angeles Lakers are sold for 650 Million. At a tax rate of 25% what is the new owner's yearly tax savings if he uses straight line depreciation of the purchase price over the full 15 years allowed by the IRS?

  Required return on investment

Perpetuity Values/ Bob's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $700 per year forever. If the required return on this investment is 12 percent, how much will you pay for the policy?

  The flotation cost for selling new shares

Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company’s outstanding bonds is 7.75%, its tax rate is 40%, the next expected dividend is $0.65 a share, the flotation cost fo..

  What is the effect on the terms of the contract

A trader has a put option contract to sell 100 shares of a stock for a strike price of $650. What is the effect on the terms of the contract of:

  Perfectly negatively correlated and their standard deviation

Stocks A and B are perfectly negatively correlated and their standard deviations are 0.20 and 0.30, respectively. What is the standard deviation of a portfolio with 50% invested in Stock A and 50% invested in Stock B?

  What is the stock price for omega technology

What is the stock price for Omega Technology and what arbitrage opportunity is available? What assumptions are necessary to exploit this opportunity?

  Average ratios to construct a pro forma balance sheet

Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc. The company's total assets are $___________(round to the nearest dollar) The company's fixed assets are $___________(round to the nearest dollar) ..

  Apply theories, models, and practices of global operations

Develop innovative and sustainable solutions to strategic and global operations management challenges.

  Business loan with an annual effective rate

A $1, 000, 000 business loan with an annual effective rate of 15% is being repaid with annual payments of $200, 000 plus a smaller final payment. The first payment is due one year after the loan is taken out. Determine the interest portion of the fin..

  Will ventura benefit more from exchange rate effects

Will Ventura benefit more from exchange rate effects if its parent provides equity financing for the subsidiary or if the subsidiary is financed by local banks in Japan? Explain.

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