Constant Growth Valuation

Woidtke Manufacturing's stock currently sells for $24 a share. The stock just paid a dividend of $3.50 a share (i.e., D0 = $3.50), and the dividend is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent.

Lockbox system : Hardin-Gehr Corporation (HGC) began operations 5 years ago as a small firm serving customers in the Detroit area. However, its reputation and market area grew quickly. Today HGC has customers all over the United States. Despite its broad customer bas.. |

Receivables investment-what are the days sales outstanding : McDowell Industries sells on terms of 3/10, net 25. Total sales for the year are $1,561,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 74 days after their purchases. Assume 365 days in year for .. |

Cost of trade credit and bank loan : Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 70; and it currently pays after 5 days and takes discounts. Lamar plans to expand, which will require additional financing. Assume 365 days in year for your calculation.. |

Conversion cycle-by how much would pre-tax profits change : Primrose Corp has $19 million of sales, $3 million of inventories, $2 million of receivables, and $3 million of payables. Its cost of goods sold is 70% of sales, and it finances working capital with bank loans at an 7% rate. By how much would pre-tax.. |

Constant growth valuation-what stock price is expected : Woidtke Manufacturing's stock currently sells for $24 a share. The stock just paid a dividend of $3.50 a share (i.e., D0 = $3.50), and the dividend is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from.. |

Changes tend to affect aggregate payout ratios : How would each of the following changes tend to affect aggregate payout ratios (that is, the average for all corporations), other things held constant? An increase in the personal income tax rate. A liberalization of depreciation for federal income t.. |

Discuss the marketing objectives : Imagine that you are the product manager for a new electric car similar to the Chevrolet Volt or Toyota Prius. Using all of your knowledge of the new product life cycle, speculate on the stages of the life cycle your electric car will pass through, b.. |

Creating a marketing plan- what types of strategy : Imagine that you are creating a marketing plan for a company that will sell ice cream cones. As you consider the marketing program, what types of strategy should you consider including in the plan? Propose one specific example of each type of strateg.. |

The bonds current market price : A bond has 5 years to maturity and has a YTM of 8%. Its par value is $1,000. Its semi annual coupons are $50. What is the bonds current market price? |

## The existence of unemployment compensationThe existence of unemployment compensation most likely will cause less unemployment. |

## Able to buy a really cool new carBart Simpson, age 10, wants to be able to buy a really cool new car when he turns 15. His really cool car costs $16,000 today, and its cost is expected to increase 3 percent annually. Bart wants to make one deposit today (he can sell his mint-conditi.. |

## Define the decision variables and constraintsThe Electrocomp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air condition takes 3 hours of wiring and 2.. |

## Mutually exclusive projectProject S costs $15,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L costs $37,500, and its expected cash flows would be $11,100 per year for 5 years. If both projects have a WACC of 14%, which proje.. |

## Non-dividend-paying stock whose current priceNon-dividend-paying stock whose current price S(0) = S is $40. After each period, there is a 60% chance that the stock price goes up by 20%. If the stock price does not go up, then it drops by 10%. |

## Saving for retiermentMiley expects to receive the following payments: Year 1 = $50,000; Year 2 = $28,000; Year 3 = $12,000. All of this money will be saved for her retirement. If she can earn an average of 10.5 percent on her investments, how much will she have in her ac.. |

## Explain level of incremental sales is associated with pizzaAssume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza? |

## Firm has issued cumulative preferred stockA firm has issued cumulative preferred stock with a $50 par value and a 8 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid ________ prior to paying the .. |

## Addition net working capital investmentsProduction of the implants will require $1,800,000 in net working capital to start and addition net working capital investments each year equal to 15 percent of the projected states sales increase for the following year. Total fixed costs are $2,500... |

## Why did the us withdraw form the bretton woods systemWhat conditions will one observe floating exchange rates operating in the gold standard system and explain why the expectation of inflation in country A will lead to a higher nominal rate of interest on securities denominated in A'S currency, but h.. |

## What will be your real returnSuppose that you buy a two-year 8.1% bond at its face value. What will be your nominal return over the two years if inflation is 3.1% in the first year and 5.1% in the second? What will be your real return? |

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