Average firm in the industry, Financial Accounting

Suppose that the average firm in your company's industry is expected to grow at a constant rate of 4% and that its dividend yield is 8%. Your company is about as risky as the average firm in the industry, but it has just successfully done some R&D work that leads you to expect that its earnings and dividends will rise at a rate of 50% [D1 = D0(1 + g) = D0(1.50)] this year and 25% the following year, after which growth should return to the 4% industry average. If the last dividend paid (D0) was $2.25, what is the value per share of your firm's stock?

 

Posted Date: 3/30/2013 1:32:35 AM | Location : United States







Related Discussions:- Average firm in the industry, Assignment Help, Ask Question on Average firm in the industry, Get Answer, Expert's Help, Average firm in the industry Discussions

Write discussion on Average firm in the industry
Your posts are moderated
Related Questions
Middlehurst House is a daycare center/preschool which operates as a partnership of George Friedman and Bill Compton. The center is in a city that has a large base of twoincome fami

Suppose you are a financial manager of Yuen Cheong Manufacturng Company. Due to the rising demand of product X, Yuen Cheong Manufacturng Company decides to open a new production pl

discuss the content of financial statement with reference to Indian companies?

The following information was taken from the ledger of Jefferson Industries, Inc.: Direct labor $85,000 Administrative expenses $59,0

Calculation of Profitability ratios  -                     2008 2009 2010 G Net Sal

You are considering whether or not to go to graduate school. Well... there are many things to consider, of course, such as the type of job you would thus get, the opportunity to li

how do we calculate bonus issu4 and rights issue

Statute of Limitations - This sets out the period within that actions may be brought upon claims or within which rights may be enforced. As it concerns to tax returns, statute of l

The Federal Government The Federal Government is the single largest influence on the U.S. economy. There are two main areas in which the government can impact the economy: fi

Payments needed? Zach Taylor is settling a $27,000 loan due today by making 6 equal annual payments of $6018.83. What payments must Zach Taylor make to settle the loan at the inter