What is the expected capital gain from the sale

Assignment Help Finance Basics
Reference no: EM13280627

Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year. If its equity cost of capital is 8%, what is the expected capital gain from the sale of this stock at the end of the coming year?

a) 14.28
b) 58.52
c) 4.86
d) 3.48

 

Reference no: EM13280627

Questions Cloud

What will be the current value of a single share : Spacefood products will pay a dividend of $2.40 per share this year. It is expected that this dividend will grow by 3% per year each year in the future. What will be the current value of a single share of Spacefood's stock if the firm's equity cos..
What will be the net cash flow for year one of this project : The firm has a tax rate of 30 percent, an opportunity cost of capital of 12 percent, and it expects net working capital to increase by $57,000 at the beginning of the project. What will be the net cash flow for year one of this project?
What is the power delivered by a motor for this ascend : An elevator with a mass of 1000 kg, including passengers, is ascending at constant speed. What is the power delivered by a motor for this ascend
Probability that their first child will have a tail : What is the probability that their first child will have a tail and what proportion of their offspring is expected have achondroplasia?
What is the expected capital gain from the sale : Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year. If its equity cost of capital is 8%, what is the expected capital gain from the sale of this stock ..
Find the weight of the automobile : The four tires of an automobile are inflated to a gauge pressure of 1.9 multiply.gif 105 Pa. Determine the weight of the automobile
What is price that prudent investor would be willing to pay : If valorous has an equity cost of capital of 8%, what is the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today?
Calculate the shear modulus of the wood : A plank 2.00 cm thick and 12.4 cm wide is firmly attached to the railing of a ship by clamps so that the rest of the board extends 2.00 m, find the shear modulus of the wood
What is the project net investment outlay in year 0 : The firm's tax rate is 40 percent and its approriate cost of capital is 10%. What is the project's net investment outlay in year 0?

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine maximum loss risk

John has just begun investing, & one of his friends was mentioning how he could use short selling as an effective method to drive up his returns when market started to go down.

  Calculate risk premium on common stock in each year

Here are stock market and Treasury bill returns between 2000 and 2004: Calculate the risk premium on common stock in each year?

  How much would he be able to withdraw annually

Joe inherited $25,000 and wants to buy an annuity that will give him steady income over the next 12 years. He has heard that the local bank is currently paying 6% on an annual basis. If he were to deposit his funds here, how much would he be able ..

  Finding impact on cost of debt if risk free rate increase

Two investors are estimating GE's stock for possible purchase. They agree on the expected value of D1 and on expected future growth rate. Further, they agree on the riskiness of the stock.

  What is the marginal cost per pair

K-Too Everwear Corporation can manufacture mountain climbing shoes for $42.88 per pair in variable raw material costs and $25.30 per pair in variable labor expense. The shoes sell for $122 per pair. Last year, production was 90,000 pairs. Fixed co..

  What is weighted average cost of capital for the company

The company is in the 40% tax bracket. What is the weighted average cost of capital (WACC) for the company?

  What is your net dollar sales projection for this year

Cyber Security Systems had sales of 4,200 units at $100 per unit last year. The marketing manager projects a 10 percent increase in unit volume sales this year with a 25 percent price increase. Returned merchandise will represent 6 percent of tota..

  What exactly is the sml

What exactly is the SML? How does inflation impact the SML?

  Computation of value of the bond

Computation of value of the bond and what will happen to the equilibrium term structure according to the Expectations Hypothesis

  Compute the net realizable value of receivables

Accounts receivable and the allowance for doubtful accounts carried balances of $30,000 and $500, respectively. During the year the corporation reported $70,000 of credit sales.

  What are the annual total cash flows

What are the annual total cash flows? What is the NPV if the project has a 13% required return?

  What is the variance of these returns

Assume that for a 5-year period, large-company stocks had annual rates of return of 21.04 percent, -9.10 percent, -11.89 percent, -22.10 percent, and 28.89 percent. What is the variance of these returns?

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