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
i need to find out how quickly i could get some answers to stock valuation questions on antamina mines case and how cheaply

As the company''s sales and earnings increased, so did the demand for capital. The firm''s needs included inventory as well as additional space to house the inventory, computer fac

you buy a car for ths 10000000 to be repaid in 3 years, with annua interest of 12%. preapare a loan amortization table

Who regulates the stock market and the reason for the need for such standard and heavy regulations

Question: a) Using illustrative and numerical examples, differentiate between arbitraging and speculation in the context of foreign exchange market. b) One year borrowing

YOU ARE A CEO OF A SOFTWARE COMPANY WHICH HAS LIMITED ACCESS TO DEBT EQUITY MARKETS. YOUR FIRMS AVERAGE RETURN ON LAST YEAR PROJECTS IS 28% AND COST OF CAPITAL IS 12 %.Would Npv or

Question 1: (a) Explain the five principles of the bureaucratic approach to management as put forward by Max Weber. (b) What are the advantages and disadvantages of the bu

#questionSelecting Kanton Company''s Financing Strategy and Unsecured Short-Term Borrowing Arrangement. Morton Mercado, the CFO of Kanton Company, carefully developed the estimate

This method simply calculates the average of a number of expert estimates. Let E denote the number of experts, and mn,e denote the forecast of expert e, e =1, ... ,E, for SKU n 2N.

Question 1: i) Each of the following statements has been put forward as an explanation of determinants of exchange rate: a) ‘the increase in the value of a currency is becau