What is the price of the stock five years from now

Assignment Help Financial Management
Reference no: EM131329455

A company is growing at a constant rate of 10 percent. Last week it paid a dividend of $2.83. If the required rate of return is 15 percent, what is the price of the stock five years from now?

Reference no: EM131329455

Questions Cloud

Draw respective cash flow diagrams and carryout : The City of Boulder Colorado is considering three sites for flood control dams to prevent flooding resulting from the annual spring snow melt in the Rocky Mountains. Each dam would be built on different branches of a large river, designated as the Ea..
Companies invest in other companies to gain influence : You mentioned that companies invest in other companies to gain influence over the decisions of the company. Companies have different motivations for investing in securities issued by other companies. How do you think the financial aspect influence th..
Statements about preferred stock : Which of the following statements about preferred stock is FALSE? Preferred stock has a higher-priority claim on the firm’s assets than the common stock
What is the current price of the stock : Grant, Inc. is a fast growing company and its dividend is expected to grow at a rate of 10 percent for the next two years. It will then settle to a constant growth rate of 5 percent. If the last dividend was $6.20 and the required rate of return is 1..
What is the price of the stock five years from now : A company is growing at a constant rate of 10 percent. Last week it paid a dividend of $2.83. If the required rate of return is 15 percent, what is the price of the stock five years from now?
Firm has the book-value balance sheet : A firm has the following book-value balance sheet; Debt =$ 5 ,000, Common Stock ($1 par)= 556 and Retained Earnings = $ 27 ,000. The book value of assets is the total of Debt, Common Stock and Retained Earnings. The firm's bonds are currently selling..
What would be the present value of this bond : Determine the value of a $1000 face value bond with a stated interest rate of 7% return and a 10 year life ? If interest rate increase to 10% , what would be the present value of this bond? If interest rate decrease to 5%, what would be the present v..
What is maximum price per share schultz should pay for arras : Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz, and the acquisition would allow Schultz to better control its material supply. The current cash flow from assets for Arras is $7 million..
What is the wacc for the company : The Saunders Investment Bank has the following financing outstanding. Debt: 40,000 bonds with a coupon rate of 8 percent and a current price quote of 112.0; the bonds have 20 years to maturity. 210,000 zero coupon bonds with a price quote of 18.5 and..

Reviews

Write a Review

Financial Management Questions & Answers

  Based on the so-called bird-in-hand theory

Based on the so-called Bird-in-Hand theory it can be concluded that:

  Relevance to financial management

2 pages single space. A)   Overview/Summary, B)  Opinion/Analysis, C)  Relevance to financial management, The Overview/Summary section should include a statement of the author’s hypothesis or proposition. This section should be the briefest.

  Why the bank should authorize and make the dividend payment

Suppose that your bank had reported a substantial loss during the past year. You are meeting with the bank's board of directors to discuss whether the bank should make its traditional (25 years straight) dividend payment to common stockholders. Provi..

  What is the one period risk-free rate of interest

What is the one-period risk-free rate of interest? - If there were two securities and three states of nature, you would not be able to find a completely risk-free portfolio. Why not?

  Negligible amounts of cash and marketable securities

Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain’s 2016 sales (all on credit) were $121,000; its cost of goods sold is 80% of sales; and it ..

  What is the receivables turnover and annual credit sales

Evil Pop, Inc., has an average collection period of 37 days. Its average daily investment in receivables is $89,600. Assume 365 days per year. What is the receivables turnover? What are annual credit sales?

  What do you think the the monetary authority was attempting

Depositary institutions have great responsibility to determine to whom they lend money. With a low interest rate environment for almost a decade, what do you think the the monetary authority, FOMC, was attempting?

  Bonds two years ago at coupon rate

Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 8.9 percent. The bonds make semiannual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?

  In what year do you break even on your investment

You invest $6,300 now and receive $1,500 at the end of year 1, $1,400 at the end of year 2, $1,300 at the end of year 3 and so on. In what year do you break even on your investment? Use the discounted payback approach, not simple payback, and assume ..

  Capital structure weights on a market value basis

Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $6. The company also has two bond issues outstanding. What are the company's capital structure weights on a book value ba..

  Hat was the firm premoney valuation

HydroxyMap is a manufacturer of underwater mapping technology. If the firm received an investment of $4.7 million, and its postmoney valuation is $12.5 million, what was the firm’s premoney valuation?

  What is the price of this bond today

Suppose that Diversified Technology has a B-rated bond with exactly 30 years until maturity, a face value of $1000 and a semiannual coupon rate of 6%. The yield to maturity on B-rated bonds today is 10 percent. What is the price of this bond today? w..

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