Treasury bond rate-derive stock price of this company

Assignment Help Financial Management
Reference no: EM13939538

We have the following information for the company. The stock pays a $10 dividend, and it will grow by 100% the first year, 30% the second year and 3% forever after that. The unlevered beta is 1, D/E is 60/40 and the tax rate is .3. Additionally, we know the Treasury bond rate is .08 and the ROR of the S&P has been 10%. Derive the stock price of this company.

Reference no: EM13939538

Questions Cloud

Illustrates the relationship between bens total costs : Prepare a graph that illustrates the relationship between Ben's total costs (the sum of the costs of giving opening shows and running the gallery) and the number of opening shows given
Problem regarding the effective property tax rate : The most important parts is the effective property tax rate in district A and the following question. Consider the following scenarios for the fictional state of Inequity which consists of five local districts. Assume that Inequity has a gaurantee..
Using arithmetic and geometric growth rates : Suppose Powers Ltd. just issued a dividend of $2.62 per share on its common stock. The company paid dividends of $2.12, $2.19, $2.36, and $2.46 per share in the last four years. If the stock currently sells for $81, what is your best estimate of the ..
Introduction of the country and company : To write about a company and country with introduction of the country and company, with pestle, porters five force , strategic 4 strategic recommendations and conclusion with references list.
Treasury bond rate-derive stock price of this company : We have the following information for the company. The stock pays a $10 dividend, and it will grow by 100% the first year, 30% the second year and 3% forever after that. The unlevered beta is 1, D/E is 60/40 and the tax rate is .3. Additionally, we k..
Unit description and learning outcomes : This unit provides a critical overview of research perspectives and practices in the social sciences and humanities, with particular reference to education and communication, and to such generic practices as reading and critiquing research reports..
What is the theme of the story : In what way is setting significant in Kate Chopin's "The Story of an Hour"? What is the theme of the story and What are some of the aspects of Sammy's personality in "A & P" that we like/dislike
How much income must floyd report in total : How much income must Floyd report in total on this sale in the second year?
Examples of workplace-organisational communication : YOUR TASK : Analyse examples of workplace/organisational communication you have been personally involved in, using the models and theories of communication practice discussed in this unit thus far.

Reviews

Write a Review

 

Financial Management Questions & Answers

  Find the debt and assets ratio

Ichinomiya Company has a total value of $54 million. Its debt is in the form of zero-coupon bonds, which will mature in 4 years. The face value of bonds is $15 million. The riskless rate is 3.15% at present. The σ of Ichinomiya is 0.42. Find the debt..

  What is the value of the quick ratio

Jessica's Boutique has cash of $50, accounts receivable of $60, accounts payable of $400, and inventory of $100. What is the value of the quick ratio? A firm has net working capital of $600, net fixed assets of $2,400, sales of $8,000, and current li..

  What is the new divisor for the price-weighted index

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $36, $312, and $82, respectively. If Baker undergoes a 3-for-2 stock split, what is the new divisor for the price-weighted index?

  What is the probability that the colors match

Abe holds 1 green and 1 red jelly bean in his hand. Bea holds 1 green, 1 yellow, and 2 red jelly beans in her hand. Each randomly picks a jelly bean to show the other. What is the probability that the colors match?

  What are the nominal and effective costs of trade credit

Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were $4,562,500 and accounts receivable averaged $437,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of t..

  Expected return on the market

Security I has a beta of 1.3, the risk-free rate is 4%, and the expected return on the market is 11%. What is the expected return for Security I?

  Value of one share to investor who requires rate of return

Mc Donalds corp. preferred stock pays an annual dividend of $5 per share. Calculate the value of one share to an investor who requires a rate of return of : Calculate the yield of the Mc Donalds corp preferred stock of problem 13 if its market price ..

  Required return on stock-what is the current share price

A pocalyptica Corp. pays a constant $29 dividend on its stock. The company will maintain this dividend for the next 13 years and will then cease paying dividends forever. If the required return on this stock is 10 percent, what is the current share p..

  How much accrued interest will shift between buyer-seller

In the case of a coupon bond being purchased 77 days since the last coupon payment of $76.21, how much accrued interest will shift between buyer and seller if bond pays semi-annual coupons (i.e. coupon payments are typically 180 days apart)?

  Assume the information for home mortgage

Assume the following information for a home mortgage: Original loan amount = $130,000 Annual interest rate = 5.75% Term of loan = 30 years. How much principal and interest was paid in year four, and what is the principal balance on the loan after fou..

  Annualized holding period return

John purchased 100 shares of Black Forest Inc. stock at a price of $153.77 three months ago. He sold all stocks today for $161.14. During this period the stock paid dividends of $4.02 per share. What is John’s annualized holding period return (annual..

  Ratio analysis - calculate the current ratio

Ratio Analysis - Calculate the current ratio, quick ratio, cash to current liabilities ratio, over a two-year period. Discuss and interpret the ratios that you calculated

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