Determine the stock price, Corporate Finance

GeKay Inc. currently (January 1) has a net income of $10,000,000 which is expected to grow indefinitely(perpetuity) at 10% per annum.  

The firm is financed at a debt-to -value ratio of 30%. The firm has a 50% dividend payout to shareholders (dividends paid at year-end), with 10m shares of common stock outstanding.

The firm pays taxes at the 36% rate. The stock has a (levered) Beta of 1.2 and the market risk premium (MRP) is 6%. The risk free rate (RF) is 4% and the firm's Cost of Debt is 5.5%.  

Determine the stock price?

Posted Date: 4/5/2013 5:30:19 AM | Location : United States

Related Discussions:- Determine the stock price, Assignment Help, Ask Question on Determine the stock price, Get Answer, Expert's Help, Determine the stock price Discussions

Write discussion on Determine the stock price
Your posts are moderated
Related Questions
The East Coast Conglomerate Co (ECCC) a small manufacturing company is doing a risk management assessment and a total review of their insurance policies. They have asked you,  know

The Chocolate ice cream company and the vanilla ice cream company have agreed to merge and form Fudge Swirl Consolidated.Both companies are exactly alike that are located in differ

Market-Adjusted and Two-Factor Models - Event Study As mentioned previously, you can use several alternative models to calculate a security's expected return. The market-adjus

#the managing directors of three profitable listed companies discussed their company''''s dividend policies. company A has deliberately paid no dividends for the past five years. c

X is owned entirely by two individuals, A and B (who are unrelated unless otherwise stated).  A owns 60 shares of X common stock (purchased in one transaction for $600).  B owns 40

Differences btn debt finance and preferance share capital

a)    Put options on Chicken King with a strike price of $42.50 and 2 months to maturity are properly priced to sell for $3.68 (no bid-ask spread).  Call options with the same stri

Problem: i) Consider the following apparently contradictory statements: a) ‘ an increase in the rate of growth in a country's national income relative to that in the rest

Determine monthly saving: Based on the following information, answer the questions. You consider a retirement plan. The retirement plan will give you $1,000 every month for 1

PROBLEM 1 A friend of yours, employed as a Tier 2 field service representative for a telephony corporation, wants your help as a financial specialist to determine the financial co