3, Management Theories

Johnson has to decide whether to purchase a preference share which redeemable or one which is not.
The redeemable share is $1000 per value share which promises 15% dividend annually with a call price of 975 in (six)6years time whereas the non redeemable share of the same par value pays 18%  dividend the redeemable and non redeemable have market value of $990 and $1025 respectively.
Assume the investors required rate of return to16%
a.which share should Johnson purchase and why?
b.Purity incorporated has a share which pays a dividend of $4.5 to shareholder last year.It is expected dividend will increase at a rate of 4% for the first year.
8% for the next  four(4) years and pick at 6% forever the required rate of return 9.5%
What is the value of the share today?
Thanks
Posted Date: 10/27/2012 9:55:46 AM | Location : United States







Related Discussions:- 3, Assignment Help, Ask Question on 3, Get Answer, Expert's Help, 3 Discussions

Write discussion on 3
Your posts are moderated
Related Questions
Question : a) What provisions have been in the Constitution as regard (i) the appointment of the Director of audit. (ii) reports of the Director of Audit. b) What are

how did the industrail revelution increase the need of formal theroy

Specific steps in the Case Study Approach: a. Determining Present Status: The first step is to gather descriptive information, which will determine as precisely as possible th

Five Forces Model A framework built by Michael Porter that captures the dynamics of the prevailing environmental forces in which an organization operates.  These factors i

henry gantt contributions to scientific managenentr

What is promotion

what is the structure of the grasfian follicle and testis

1. How would you examine if there is any merit in the remarks of various functional managers? 2. What, in your opinion, could be the reasons for different Managerial thinking in th


I am reading the case make-to-order automoblies at gm''s gravatai plant and I can''t figure out how to answer the following question: what sort of problems do you see with this typ