What should price per share be for firms common stock

Assignment Help Financial Management

Reference no: EM13909182

Suppose a firm is anticipated to have a Net Income per Share of $25 next year and is expected to pay only 20% of (total) Net Income in Dividends. Also, the firm faces an unusually high cost of common stock of 22% and has an unusually low dividend growth rate of 2%. What should the price per share be for this firm's common stock?

Reference no: EM13909182

Questions Cloud

Statements regarding mortgage pass-through bonds : Which of the following statements regarding mortgage pass-through bonds (MPTBs) is FALSE?

What must the expected return on this stock be : A stock has a beta of 0.9, the expected return on the market is 16 percent, and the risk-free rate is 8.8 percent. What must the expected return on this stock be?

Define the term business process reengineering : Define and contrast the following pairs of terms: dot-com and bricks-and-clicks; intranet and extranet; B2C and B2B. Define the term business process reengineering, and describe its importance to information systems work.

Debt obligation of the issuer : Which of the following investments in NOT a debt obligation of the issuer?

What should price per share be for firms common stock : Suppose a firm is anticipated to have a Net Income per Share of $25 next year and is expected to pay only 20% of (total) Net Income in Dividends. Also, the firm faces an unusually high cost of common stock of 22% and has an unusually low dividend gro..

What is the ytm and current yield : Rolling Company bonds have a coupon rate of 9.40 percent, 19 years to maturity, and a current price of $1,256. What is the YTM? The current yield?

What is the yield to maturity for bonds : Atlantis Fisheries issues zero coupon bonds on the market at a price of $319 per bond. Each bond has a face value of $1,000 payable at maturity in 11 years. What is the yield to maturity for these bonds?

What is the price of the stock five years from now : O'Leary Corporation's last dividend paid was $1.00. Dividends are expected to grow at a rate of 17% this year, 15% next year, 10% the following year and 5% thereafter. The required rate of return is 15%. What is the price of the stock 5 years from no..

Suggestion of a social networking web application : You are an employee of your state's department of motor vehicles (DMV). The people of your community come in to receive services related to driver's licenses, driver's tests, vehicle registration, personalized license plates, and so forth.

User Account

All Pages