What is the expected dollar dividend over next three years

Assignment Help Finance Basics
Reference no: EM13291161

A broker offers to sell you shares of Bay Area Healthcare which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 4% per year. The stock's required rate of return is 12%.

a. what is the expected dollar dividend over the next three years?
b. what is the current value of the stock and the expected stock price at the end of each of the next three years?
c. what is the expected dividend yield and caital gains yield for each of the next three years?
d. what is the expected total return for each of the next three years?
e. how does the expected total return compare with the required rate of return on the stock? does this make sense? explain your answer.

 

Reference no: EM13291161

Questions Cloud

Define what are the ph and alkalinity of the three solutions : What are the pH and alkalinity of these three solutions immediately after you make them
Calculate the voltage drop between two potential probes : A current of 2 A flows through a slab of tin, 1 mm thick and 2mm wide, whose conductivity is 106 1/Ωm. Calculate the voltage drop between twopotential probes that are 10 cm apart along the slab.
What is the expected dividend yield and expected capital : what is the expected dividend yield and expected capital gains yield for the coming year?
Find the total heat for this three-step process : One mole of a monatomic ideal gas has an initial pressure, volume, and temperature of Po, Vo, and 335 K, respectively. Find the total heat (including the algebraic sign) for this three-step process
What is the expected dollar dividend over next three years : A broker offers to sell you shares of Bay Area Healthcare which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 4% per year. The stock's required rate of return is 12%.
Estimate the time constant of the circuit : A capacitor is charged to a potential of 12.0 and is then connected to a voltmeter having an internal resistance of 3.10. estimate the time constant of the circuit
No aspect of our mental life is more important to the : No aspect of our mental life is more important to the quality and meaning of our existence than emotions. They are what make life worth living, or sometimes ending
Explain what would be the ph after the solutions : What pH will would measure for these solutions immediately. What would be the pH after the solutions equilibrate with the atmosphere
What is the firm expected stock price in five years : If MCA's dividends are expected to grow at a constant rate in the future what is the firm's expected stock price in five years?

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the standard deviation of the returns

Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%.

  What is the firms profit margin

A firm has sales of $211,000, depreciation of $24,600, interest expense of $560, COGS of $148,900, other cost of $6,500, and tax rate of 35%. What is the firm's profit margin?

  Calculate the new price

A bond's credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields to maturity (YTM) of 4.3%. A-rated bonds sell at yields (YTM) of 3.6%. Assume a 10-year bond with a coupon rate of 5% is downgraded by Moodys from..

  What equal annual ammount must garrett save at the end

What equal annual ammount must Garrett save at the end of each year (the first deposit will occur on his 31st and the last deposit will occur on his 60th birthday) to meet these retirement goals?

  How much does a share of preferred stock cost today

E-Eyes.com Bank just issued some new preferred stock. The issue will pay an annual dividend of $17 in perpetuity, beginning 6 years from now. If the market requires a return of 3.1 percent on this investment, how much does a share of preferred sto..

  Calculation of modified internal rate of return

Calculation of Modified Internal Rate of Return [MIRR] of even cash flows and You have calculated a cost of capital of 12% for ASI

  How high of a return do you need to earn

Assuming the most you can afford to save is $1000 per year, but you want to retire with $1 million in your investment account, how high of a return do you need to earn on your investment?

  What is the value of these bonds

Ten-year zero coupon bonds issued by the U.S. Treasury have a face value of $1,000 and interest is compounded semiannually. If similar bonds in the market yield 11.05 percent, what is the value of these bonds?

  Calculate compensation expense

Stoner Company granted stock options to key employees for the purchase of 60,000 shares of the firm's common stock at $25 per share.

  What is the fair price for this stock

A stock expects to pay it's first ever dividend of $1 five years from today. From that point onward, dividends are expected to grow by 10% per year forever. What is the fair price for this stock if it has a required return of 14%?

  What is the cross-rate in terms of yen per pound

Assume that U.S. six-month Treasury bills have an annualized rate of 6.2% while default-free Japanese bonds that mature in six months have an annualized rate of 5.0% and that interest rate parity holds. Find the six-month forward exchange rate in ..

  Calculate the investment amount

Dixon Shuttleworth has been offered the choice of three retirement-planning investments. The first investment offers a 5% return for the 1st five years, a 10% return for the next five years, and a 20% return thereafter.

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