Constant growth dividend model

Assignment Help Financial Management
Reference no: EM131609799

Amazon pays a $2.75 dividend right now. You expect this dividend to grow at 4.75% a year indefinitely. Given the risks inherent in this forecast, you demand an 8.25% return on this investment. Using the Constant Growth Dividend model, what is the maximum you would pay for the stock? Show work.

Reference no: EM131609799

Questions Cloud

How would you analyze us treasury bills and bonds : How would you analyze US Treasury Bills, Promissory Notes, and Bonds? Is it necessary to have distinct debt securities such as these, why or why not?
Prepare journal entry for this issue of stock : ABC issued 1,000 shares of $10 par value common stock for $15,000. Prepare journal entry for this issue of stock
Is there any tradeoff resulting from strategy to avoid risk : Its foreign cash inflows to be received from exporting and cash outflows to be paid for imported supplies over the next year are shown in the following table.
Explain one type of business that needs a financial manager : Explain one type of business that needs a financial manager and their function in that business. How do the 4Ps come into play in this environment?
Constant growth dividend model : Using the Constant Growth Dividend model, what is the maximum you would pay for the stock?
Compute the basic earnings per share : Required: Compute the basic earnings per share and the diluted earnings per share. The tax rate is 30%
Determine manually-trial and error and rate of return : Determine manually, by trial and error, Lucinda’s rate of return, determine Lucinda’s rate of return if she owns the house for 6 months.
Construct formal proofs for all the arguments below : Construct formal proofs for all the arguments below. Use equivalence rules, truth functional arguments, and the rules of instantiation and generalization.
Determines total compensation expense : The Black-Scholes option pricing model determines total compensation expense to be $1,900,000

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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