What is its current stock price

Assignment Help Financial Management
Reference no: EM13847172

The last dividend paid by Florida Gator Inc. was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a constant rate of 6% forever. If the firm’s required return (Rs) is 11%, what is its current stock price?

Reference no: EM13847172

Questions Cloud

Examining an investment opportunity : You are examining an investment opportunity. It would require you to pay money today and then receive payments semi-annually from that investment. Since the payments you expect to receive are semi-annual, you would like to know your semi-annual versi..
Rate of inflation-treasury bond and treasury bill : Why is $100 today worth more to you than $100 in one year’s time even if the rate of inflation is zero? If interest rates rise, would you rather be holding a 30-year Treasury bond or a 90-day Treasury bill? Please explain. What is the yield to maturi..
Bond date of maturity-what is the real interest rate : Suppose the discount rate is 5 percent and a bond promises to pay $200 per year for 10 years starting in one year and $800 at the date of maturity. What will be the price of the bond today? If the nominal interest rate is 4 percent and expected infla..
What do you predict as the price of perpetuity today : What do you predict as the price of a perpetuity today that pays $400 per year starting in 7 years when the discount rate is 3 percent? What is the rate of return from t to t+1 on a bond that is priced at $2,000 initially, provides a coupon payment a..
What is its current stock price : The last dividend paid by Florida Gator Inc. was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a constant rate of 6% forever. If the firm’s required return (Rs) is 11%, wh..
What is the terminal year cash flow : You must evaluate a proposal to buy a new machining station. The base price is $125,000, and shipping and installation costs would add another $15,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $70,000. The..
Rust bucket motor credit corporation : Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of Rust Bucket Motor, offered some securities for sale to the public on March 28, 2008. Under the terms of the deal, RBMCC promised to repay the owner of one of these securities $100,000 on M..
Difference between sensitivity analysis-scenario analysis : Explain the difference between sensitivity analysis and scenario analysis. Offer and argument for the proposition that scenario analysis offers a more realistic picture of a project’s risk than does sensitivity analysis

Reviews

Write a Review

Financial Management Questions & Answers

  What is the cost of common equity

How can you use the cost of common equity found above under (a) to compute the cost of retained earnings? Assuming the company is privately held, would you expect them to rely more heavily on equity or retained earnings? Explain your rationale.

  What is the percent return on equity

In the year 2007, the average firm in the S&P 500 Index had a total market value of fives times stockholders’ equity (book value). Assume a firm had total assets of $10 million, total debt of $6 million, and net income of $600,000. What is the percen..

  Invested in savings account with nominal interest rate

Money is invested in a savings account with a nominal interest rate of 2.4% convertible monthly for three years. The rate of inflation is 1.5% for the first year, 2.8% for the second year, and 3.4% for the third year. Find the percentage of purchasin..

  What is the yield to maturity-treasury strips

A Treasury STRIPS is quoted at 61.159 and has 11 years until maturity. What is the yield to maturity? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

  Black-scholes option-pricing model

Assume that the strike price will be 10% above today's stock value and calculate the price of this option. Provide an explanation that supports your findings.

  What is your estimate of stock bs price

The current dividend is $1.50, its current price is $15.90. You are an analyst and believe that the required return on Stock B is the same as that on Stock A. If Stock B pays a constant dividend of $ 2, what is your estimate of Stock B's price?

  Compute the cost of equity financing

This assignment shows how to Compute the cost of equity financing and aslo Compute the Weighted Average Cost of Capital.

  Find an existing budget from a published source

Using the existing budget, create a new budget for the next fiscal year. Set out the details of all the assumptions you needed in order to build this budget.

  Weighted average cost of capital if the debt-equity ratio

The Five & Dime store has a cost of equity of 15.8%, a pretax cost of 7.7%, and a tax rate of 35%. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.40?

  Calculate the rate of return in percentage

Calculate the present value of $100 in 3 years using 6.8% interest rate with continuous compounding. Suppose the futures price becomes $1,523 next month and he sells to close the futures. Calculate the rate of return in percentage up to 2 decimal poi..

  What is the definition of the term agency problem

What is the definition of the term agency problem?

  What is the firms weighted cost of capital

The H2O-Chemical Company is considering a new production facility on a plot of land that it already owns and it is located near a residential area. The land has a current market value of $1 million and was acquired 4 years ago for $600,000. If this p..

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