Company expected stock price

Assignment Help Finance Basics
Reference no: EM131180547

Problem: Toy Corp.'s common stock currently sells in the market for $32.50 per share. The company's dividend is projected to grow at a constant long-term rate of 4.50% per year. The required rate of return on Toy's stock is 14.00%. What will the company's expected stock's price be 5 years from today?

SHOW WORK

Select one:

A. $33.96

B. $36.24

C. $38.73

D. $40.50

E. $42.69

Reference no: EM131180547

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What will you pay for a share today

Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9, but management expects to reduce the payout by 4 percent per year, indefinitely. If you require an 11 percent return on this stock, what will you pay for a share..

  Computation of intrinsic value

Joy Medical Corporation is a little-known producer of heart pacemakers. The earnings and dividend growth prospects of the Corporation are disputed by analysts.

  National health corporation (nhc) has a cumulative

18.   National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $8 per share. The company has been losing money and has not paid preferred dividends for the last five years. Ther..

  Which municipality has the higher tax rate

Mary lives in Fairfax and her 4-bedroom home is appraised at $500,000. Her brother Frank lives in Prince William County and has an identical home on a very similar lot of land. Frank pays $3,200 in property taxes. Which municipality has the hig..

  Suppose an accounting event occurs and there is no market

suppose an accounting event occurs and there is no market reaction. what should we

  Despite the negatives of the options backdating scandal

Despite the negatives of the options backdating scandal, stock options have beneficial uses. List several appropriate uses of stock options.

  What was the average nominal risk-free rate

Assume large-company stocks returned 11.8 percent on average over the past 75 years. The risk premium on these stocks was 7.9 percent and the inflation rate was 3.2 percent. What was the average nominal risk-free rate of return for those 75 years?

  Give a definition of auditing

The CEO of your company recently met with the external auditors to discuss the scope of the year's audit. The auditors suggested that they conduct an integrated audit. The CEO has asked you, the accountant, to make a presentation at the next board..

  Compute the variance of returns

Four equally likely states of economy may occur next year. Below are the returns on the stocks on Belinkie Enterprises and Overlake company under each possible state.

  What factors inhibit recruitment efforts by organizations

In addition to the economy, what factors inhibit recruitment efforts by organizations? Have you ever witnessed this yourself or dealt with it another way?

  Why is it useful to transform the counts in a crosstabs

Why is it useful to transform the counts in a crosstabs to percentages of row or column totals? Once you do this, how can you tell if the variables are related?

  What is the present value at 18 percent

Rooster Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18 percent? At 24 percent?

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