User Account

All Pages

Calculate the stock price with the clean surplus dividend

Assignment Help Finance Basics
Reference no: EM131533506

Assignment: Abbott Laboratories Problem

After reading the Value Line figures and information on Abbott Laboratories in the Questions and Problems section of Chapter 6 (just before Problem 27), complete Problems 27, 28, 29, 30, and 31 and submit to your instructor. Show your calculations and in your response to problem 31 write a 100 to 200 word defense of your position as to the value of Abbott Laboratories stock at its current price of $50 per share.

27. What is the sustainable growth rate and required return for Abbott Laboratories? Using these values, calculate the 2010 share price of Abbott Laboratories Industries stock according to the constant dividend growth model.

28. Using the P/E, P/CF, and P/S ratios, estimate the 2010 share price for Abbott Laboratories. Use the average stock price each year to calculate the price ratios.

29. Assume the sustainable growth rate and required return you calculated in Problem 27 are valid. Use the clean surplus relationship to calculate the share price for Abbott Laboratories with the residual income model.

30. Use the information from the previous problem and calculate the stock price with the clean surplus dividend. Do you get the same stock price as in the previous problem? Why or why not?

31. Given your answers in the previous questions, do you feel Abbott Laboratories is overvalued or undervalued at its current price of around $50? At what price do you feel the stock should sell?

Reference no: EM131533506

Questions Cloud

What might we do to attenuate the problems she describes : Sherry Turkle raises concerns about our new dependence on mobile devices, including the fact that "We're lonely, but we're afraid of intimacy."
Compute seasonal indices for quarter based on cma : A). Compute seasonal indices for each quarter based on a CMA. B). Deseasonalize the data and develop a trend line on the deseasonalize data.
For what product groups does dell provide segment data : Access the March 18, 2010, filing of the fiscal 2010 10-K report for Dell (ticker DELL) at www.sec.gov. Read its Note 14 that details Dell's segment.
How do you see an emoticon language fitting in the mix : Share your thoughts on emoticons being a language in the future. Do you think this is possible? Explain.
Calculate the stock price with the clean surplus dividend : Use the information from the previous problem and calculate the stock price with the clean surplus dividend.
Study of bottled water companies conducted by health council : A four year study of bottled water companies conducted by a health council found that 25% of bottled water is just tap water packaged in a nice bottle.
Explain the impact of language on critical thinking : Explain the impact of language on critical thinking and decision making. Make sure you include the challenges presented by language.
Explain the problem and develop a testable hypothesis : Explain the problem and develop a testable hypothesis. How will you know if you have solved the problem
What is the interest rate for two years : What is the interest rate for two years? Suppose a bond with three years until maturity and an 8.5 percent annual coupon sells for $1,029.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd