Stocks currently provide expected rate of return

Assignment Help Financial Management

Reference no: EM13914744

Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 per share. If the stock is selling at $50 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

1. If dividend growth forecasts for MBI are revised downward to 5% per year, what will be the price of the MBI stock? (Round your answer to 2 decimal places.)

2. What (qualitatively) will happen to the company's price–earnings ratio?

Reference no: EM13914744

Questions Cloud

Rons consulting had the following normal balances : At the beginning of 2013, Ron's Consulting had the following normal balances in its accounts:Account Balance:

The us represents less then 5% of the population : The US represents less then 5% of the population. But is responsible for ___ of the worlds carbon dioxide emissions resulting from burning fossil fuels.

Credibility of wikipedia is an ongoing debate : The credibility of Wikipedia is an ongoing debate which spans the globe. The source of information is considered to be a valuable tool when conducting research. However, the argument of validity causes quite a stir in occupational and educational ..

Explain the costs and benefits of immigration : Explain the costs and benefits of immigration. What other costs or benefits to immigration would you add to this list? What are some immigration policies that you agree with? What are some that you disagree with? Why

Stocks currently provide expected rate of return : Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 per share. If the stock is selling at $50 per share, what must be the market's expectation of the growth rate of MB..

Human resources management responsibilities : The three major human resources management responsibilities are: attracting a quality workforce, developing a quality workforce, and maintaining a quality workforce.

Prepare a journal entry to record the estimated liability : Prepare a journal entry to record the estimated liability for product warranties during the month. Prepare a journal entry to record the games replaced under warranty during the month.

Find the efficient equilibrium, pe and qe for market : Find the dollar value of a per-unit gasoline tax that would achieve the efficient solution, and calculate the tax revenues generated to the gov- ernment as a result.

Identify channels for business communication : Identify channels for business communication was the most comfortable topic in week one's objectives. Obtaining a clear understanding of functions of communication, communication process, direction, and various choices of communication channels e..

User Account

All Pages