stock valuation, Financial Management

I just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. I also told that the dividends would grow continually at a rate of 3% per year starting from year 5 onwards. Assuming the required rate of return to this stock is 12%,
a) What will be the expected price of the stock at the end of year 4?
b) What is today’s expected value of the stock?
c) If the stock is currently being sold at $5.00, should I will buy the stock? Need the explain.
Posted Date: 5/6/2013 10:35:11 PM | Location :







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

Write discussion on stock valuation
Your posts are moderated
Related Questions

Q. Process of financing working capital? Working capital policies on the process of financing working capital can be characterised as moderate, conservative and aggressive. A c

It is an accounting term which refers to the balance sheet item that accounts for dividends that have been confirmed but not yet given to shareholders. Accrued dividends are taken

Compounded Value of a Series of Cash Flows: - We have considered merely single payment made once as well as its accumulation effect. An investor possibly interested in investing mo

Assume that you work with a large financial consulting firm. You are one of the junior financial consultants there specializing in IPO issue. A team of foreign investors has recent

#queThe opening balance of one of the 31-day billing cycles for Lorenzo''s credit card was $4100, but after 15 days Lorenzo made a payment of $2300 to decrease his balance, and it

What is the difference between the Euronote market, the Euro-medium-term-note market, and the Eurocommercial paper market? Answer:  Euronotes are short-term notes guarantees by

Keys Printing plans to issue a $1,000 par value, 10-year noncallable bond with a 5.00% coupon, paid semiannually. It should sell at par. The company''''s marginal tax rate is 40.00

CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME RATE OF RETURNS ON INVESTMENTS (R):15

Q. Show the Transaction risk? This is the risk occur on short-term foreign currency transactions that the actual income or cost may be different from the income or cost expecte