Compute the value of this stock with required return

Assignment Help Financial Management
Reference no: EM131893909

A firm is expected to pay a dividend of $2.15 next year and $2.45 the following year. Financial analysts believe the stock will be at their price target of $115 in two years.

Compute the value of this stock with a required return of 11.1 percent.

Reference no: EM131893909

Questions Cloud

Calculate the internal rate of return for loan : Calculate the internal rate of return for this loan. Behavioral finance suggests that
Environment in a modern classroom : How does one create a positive learning environment in a modern classroom?
What is the return of stock that trades : What is the return of a stock that trades at $35, will pay a $0.75 dividend at the end of the year, and grows at a rate of 6%?
Contribution format income statement : Bloomington Corporation reported the following on their contribution format income statement:
Compute the value of this stock with required return : Compute the value of this stock with a required return of 11.1 percent.
Npv versus the maximum possible npv : Current Design Co. is considering two mutually exclusive, equally risky, and not repeatable projects, S and L. Their cash flows are shown below.
What are the two most important forces : Based on the information found in the case, what are the two most important forces (of Porter's five) facing the game console industry at the time of the case.
Create bulleted speaking notes for your presentation : Create bulleted speaking notes for your presentation to the executive board in the Notes section of the PowerPoint.
What is price of the call option : The volatility of the stock price is 20% per annum. What is price of the call option according to the Black-Schole-Merton model?

Reviews

Write a Review

Financial Management Questions & Answers

  What is average accounting return

A project has an initial cost of $40,000 and a four-year life. What is the average accounting return?

  Considering adding a miniature golf course to its facility

SQLite Sports is considering adding a miniature golf course to its facility.

  Cash flows for two potential alternatives

Bernie’s, Sander Company is considering making a $35,000 investment and is expecting the following cash flows for two potential alternatives. Which of the alternatives would Bernie’s select under the payback method? If the inflow in year six for Inve..

  Estimate the terminal value at the end of year three

estimate the terminal value at the end of year 3.

  Level monthly payments at the end of each month

Level monthly payments at the end of each month for 30 years at a nominal interest rate of 12% convertible monthly

  The present value of walmart interest tax shield

What would be the present value of Walmart's interest tax shield if the company planned to keep its borrowing permanently at the 2007 level?

  Trading at premium or discount relative to the spot rate

Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.3% in Germany. In the spot market, 1 euro equals $1.40. What is the 90-day forward rate? Is the 90-day forward rate trading at a premium o..

  Suppose projections given for price-quantity-variable costs

Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.

  What is the external financing need if the current sales

A firm has total assets of $162,000, long-term debt of $46,000, stockholders' equity of $95,000, and current liabilities of $21,000. The dividend payout ratio is 60 percent and the profit margin is 8 percent. Assume all assets and current liabilities..

  What is the operating cash flow

Your firm has net income of $198 on total sales of $1,200. Costs are $715 and depreciation is $145. The tax rate is 34%.

  The parameters for the retirement plan

The parameters for the Retirement Plan are that you can use real information or fictional characters. Begin with a little history about the person or family (Age and stage of life). Next I would like to see net worth statement and a cash flow stateme..

  The current price of a non-dividend-paying stock

The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to rise to $37 or fall to $25. Assume the risk-free rate is zero. An investor sells a call option with a strike price of $31 per share. How would the inv..

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