What stock price would you consider appropriate

Assignment Help Financial Management
Reference no: EM131354357

The Spring Flower Co. has earnings of $2.15 per share. The benchmark PE for the company is 12.

What stock price would you consider appropriate?

What if the benchmark PE were 15?

Reference no: EM131354357

Questions Cloud

Hybrid model to make up the difference in cost : A car company offers a base model that costs $20221 and gets 24 miles per gallon in the city. The company also offers a hybrid model that costs $25376 and gets 43 miles per gallon in the city. If the cost of gas is $2.96 per gallon, how many (city) m..
What is the anticipated annual revenue : The Tire Store expects to sell 2,800 sets of tires, plus or minus 3 percent, next year. The estimated sales price is $579, plus or minus 4 percent. What is the anticipated annual revenue under the best case scenario?
What is the bond-yield-plus-risk premium estimate : The current price of Williams 10 percent coupon price, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1,140.00. The firm uses the maximum of the risk premium range. What is the bond-yield-plus-risk premium estimate for ..
Target debt–equity ratio-what is the company wacc : Tulloch Manufacturing has a target debt–equity ratio of .64. Its cost of equity is 14.6 percent, and its pretax cost of debt is 9.6 percent. If the tax rate is 34 percent, what is the company’s WACC? (Do not round intermediate calculations and enter ..
What stock price would you consider appropriate : The Spring Flower Co. has earnings of $2.15 per share. The benchmark PE for the company is 12. What stock price would you consider appropriate? What if the benchmark PE were 15?
How many coffee machines must be sold for firm to break even : Suppose that a firm manufactures coffee machines and sells them for $170 each. The costs incurred during the production and sale of these machines are $566921 plus $59 for each machine produced and sold. How many coffee machines must be sold for the ..
Calculate the depreciation tax shield for project in year : Your firm needs a computerized machine tool lathe which costs $52,000 and requires $12,200 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category...
About the salvage value after tax : Your firm needs a computerized machine tool lathe which costs $53,000 and requires $12,300 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. If the lathe can be sold for $5,300 at the end of year 3, wh..
Pitfalls in evaluating risky projects : According to the article "Pitfalls in Evaluating Risky Projects" by James E. Hodder, What are the three pitfalls that can be encountered when the DCF methodis used to make decisions?

Reviews

Write a Review

 

Financial Management Questions & Answers

  The firm can deduct the interest paid for tax purposes

On January 1, 2012, your brother's business obtained a 30-year amortized mortgage loan for $250,000 at a nominal annual rate of 7%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest deducti..

  What will the interest charges be if she elects the plans

The price of a new car is $24,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. What monthly payment will she be required to make..

  The price of custom solutions is now 65 the company pays no

the price of custom solutions is now 65. the company pays no dividends. mr. stephen conroy expects the price 4 years

  Make capital budgeting decision based on the payback period

Make a capital budgeting decision based on the payback period criteria if both projects require a $25,000 initial investment.

  What is the balance on the capital account

Suppose the United States has capital inflows of $100 billion and capital outflows of $200 billion. - What is the balance on the capital account?

  Available to pay for their childs college education

Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. Currently, college tuition, books, fees, and other costs average $ 12,700 per year. On a..

  How would you invest the money

Imagine you inherited $50,000 and you want to invest it to meet two financial goals: (a) to save for your wedding, which you plan to have in two years, and (b) to save for your retirement a few decades from now. How would you invest the money? Explai..

  Issues financial constraints-lack of contacts-legal issues

Businesses, especially small and medium sized businesses face significant obstacles when expanding globally. Identify the obstacles businesses face in the area of recruiting and selecting employees when first expanding into an international market. A..

  Assuming that debt costs and preferred stock costs

Adams Corporation can raise up to $1700 million for investment from a mixture of debt, preferred stock and retained equity. Above $1700 million, the firm must issue new common stock. Assuming that debt costs and preferred stock costs remain unchanged..

  Investment club has only two stocks in its portfolio

Portfolio Beta Your investment club has only two stocks in its portfolio; $50,000 is invested in a stock with a beta of 0.8, and $70,000 is invested in a stock with a beta of 2.3. What is the portfolio's beta?

  Computer-based order entry system

Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $52,000 at the end of that time. You will save $300,000 before..

  What is the value of share of common stock

Diana Ltd. paid a $2.50 per share dividend yesterday. The dividend is expected to grow at 10 percent per year for the foreseeable future. Diana Ltd. has a beta of 1.6, a standard deviation of returns of 30 percent, and a required return of 18%. What ..

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