Calculate the price with constant dividend growth model

Assignment Help Financial Management

Reference no: EM13880871

Sisters Corp expects to earn $7 per share next year. The firm’s ROE is 14% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%.

A) Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.)

B) Calculate the price with no growth.

C) What is the present value of its growth opportunities? (PVGO)

Reference no: EM13880871

Questions Cloud

Producing polymer that reduces friction loss in engines : Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $750,000, an operating cost of $60,000 per year, and a salvage value of $80,000 after its 2-year life. Which process should b..

Determine the fractions of the irradiation : If solar irradiation with GS = 750 W/m2 and the spectral distribution of a blackbody at 5800 K is incident on this material, determine the fractions of the irradiation that are transmitted, reflected, and absorbed by the material.

What is the required return on the companys stock : Keenan Co. is expected to maintain a constant 4.6 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 6.4 percent, what is the required return on the company’s stock?

What functions are performed by the circulatory system? : What functions are performed by the circulatory system? Are these functions common to all chordates?

Calculate the price with constant dividend growth model : Sisters Corp expects to earn $7 per share next year. The firm’s ROE is 14% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%. Calculate the price with the constant dividend growth model. What is the present value of its g..

What are three innovative technologies that can be used : What are three innovative technologies that can be used to address the needs of the organization? How do the technologies address the need

What is the yield to call for these bonds : Atlantis Fisheries issues zero coupon bonds on the market at a price of $421 per bond. These are callable in 7 years at a call price of $640. Using semi annual compounding, what is the yield to call for these bonds?

What must the coupon rate be on the companys bonds : Ghost Rider Corporation has bonds on the market with 11 years to maturity, a YTM of 6.8 percent, and a current price of $929. What must the coupon rate be on the company’s bonds?

What is the portfolios expected return : A portfolio is invested 15 percent in Stock G, 55 percent in Stock J, and 30 percent in Stock K. The expected returns on these stocks are 8 percent, 14 percent, and 18 percent, respectively. What is the portfolio’s expected return? How do you interpr..

User Account

All Pages