Find the expected dividend - stocks, Financial Management

You are considering the purchase of some shares of PECO Inc. common stock which paid a dividend of $1.50 today. You expect the dividend to grow at the rate of 7% per year for the next 3 years, and then at 5% forever. The interest rate is 8%. 

a) Find the expected dividend for each of the next four years?

b) What is the fair price of the stock today?

c) What is the fair price of the stock two years from now?

d) What is the expected annual rate of return for an investor who buys the stock today and sells it in two years?

Posted Date: 2/19/2013 4:36:21 AM | Location : United States







Related Discussions:- Find the expected dividend - stocks, Assignment Help, Ask Question on Find the expected dividend - stocks, Get Answer, Expert's Help, Find the expected dividend - stocks Discussions

Write discussion on Find the expected dividend - stocks
Your posts are moderated
Related Questions
need to understand some basics of changes in working capital

QUESTION 1 [25 marks] Xelo Ltd, whose current sales consist of fixed operating costs of R140 000 and variable operating costs equal to 22% of sales, has made the following two sale

Sarkozy Ltd is considering the selection of one of a pair of mutually exclusive investment projects. Both would involve purchase of machinery with a life of five years. Projec

Need for Simulation If the mathematical model set up could always be optimized by the analytical approach, then, there would be no need for simulation. Only when interrelation

Q. Determining Optimum Liquid Balance? Liquid balance (balance of cash and marketable securities) must be maintained at the optimum level. It is the level which gives the minim

I have a assignment of financial accounting Its a report on company Assignment length 2000 words

The calculations for the cash flows Actual amount of cash paid or received during the period needs to be established. This can get quite  tricky  as  there  would be  accruals

Joe's ice cream stroe has to decide whether to shut down this winter or stay open. His projected revenue is $1,200 per week. He has fixed costs (Mortgage, taxes, insurance, etc.) t

Under treasuries, there exist different types of securities like treasury bills, treasury notes, treasury bonds, inflation protection securities

Working of FSA The FSA Board is responsible for the management of FSA. It is appointed by the Treasury. It consists of a chairman, a chief executive officer, three managing dir