Calculating expected stock price

Assignment Help Finance Basics
Reference no: EM1367008

Kirkland Motors expects to pay a $2 / share dividend on common stock at the end of the year. The stock currently sells for $20 per share. The required rate of return on corporation's stock is 12% [ks = .12]. The dividend is expected to grow at some constant rate over time. What is the expected stock price five years from now?
a. $21.65
b. $22.08
c. $25.64
d. $35.25
e. $36.78

Reference no: EM1367008

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Prepare journal entry to record impairment of the asset

Given below is information related to copyrights owned by Yaeger Company at December 31, 2004:

  Subsidiary corporation as well as calculation of income

Sale of Machinery to Subsidiary Corporation as well as Calculation of Income in Acquired Company

  Unemployment rate been affected over past two years

How has unemployment rate been affected over past two years by Fed's policy of quantitative easing.

  Calculate the total return

Calculate the total return for each year and Indicate the level of return you would expect in 2013.

  Compute interest without breaching indenture restriction

Corporation has $100 million of 13 percent debentures outstanding. The indenture limits additional borrowing such that the total interest coverage is at least three times.

  Calculate the firms levels of earnings per share

Winners Corporation, a home appliances manufacturer, expects sales of 20,000 units at $5 each unit in the coming year and must meet the following obligations;

  Computing coefficient of variation

Mr. Sam Golff wants to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village.

  Explain the purpose and objective of accounting

You have been asked by the CEO of your firm to give a presentation to students at a local college. You were specifically asked to discuss role of an accountant.

  Calculate the price of a share

You are given the following data: Stockholders' equity $3.75 billion, price or earnings ratio 3.5, common shares outstanding fifty million, and market or book ratio 1.9.

  Problems and factors of domestic financial management

What new problems and factors are encountered in international as opposed to domestic financial management?

  Valuation methods

Explain the advantages and disadvantages of these three valuation methods:

  Finding the future value of investment

Describe the positive and negative effects of future value of investment, for a duration of:

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!

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