### Current price of stock problem

Assignment Help Financial Management
##### Reference no: EM13164846

QUESTION 1

a. The current price of Yusof Corporation stock is RM26.50 per share. Earnings next year should be RM2 per share and it should pay a RM1 dividend. The P/E multiple is 15 times on average. What price would you expect for Yusof Corporation’s stock in the future?

b. You are planning to purchase the stock of Tee’s Inc. and you expect it to pay a dividend of RM3 in 1 year, RM4.25 in 2 years, and RM6.00 in 3 years. You expect to sell the stock for RM100 in 3 years. If your required return for purchasing the stock is 12 percent, how much would you pay for the stock today?

c. Nico Corporation’s common stock is expected to pay a dividend of RM3.00 forever and currently sells for RM21.42. What is the required rate of return?

QUESTION 2

The Tapley Tank Company's last dividend was RM2.00. The dividend growth rate is expected to be constant at 25% for 3 years, after which dividends are expected to grow at a rate of 7% forever. Tapley's required return (rs) is 11%. What is Tapley's current stock price?

QUESTION 3

Kholdy Inc's bonds currently sell for RM1,275. They pay a RM120 annual coupon and have a 20-year maturity, but they can be called in 5 years at RM1,120. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between the bond's YTM and its YTC?

#### Questions Cloud

 Calculate the percent yield : Calculate the percent yield of if the reaction produces 169g of C2H5Cl . How many photons strike the leaf every second : solar radiation is 1200 , how many photons strike the leaf every second? Assume three significant figures and an average wavelength of 504 for solar radiation. Calculate how much heat is released calcium and oxygen react : Calculate how much heat is released when this reactions occurs at a constant temperature of 25.00 degree Celicus in a constant-volume container. What is heat capacity of the calorimeter inclusing the water : A calorimeter containing 200.0 mL of water was calibrated by carrying out a reaction which released 15.6 kJ of heat. If the temperature rose 3.25 degrees celcius then the heat capacity of the calorimeter inclusing the water is? Current price of stock problem : The current price of Yusof Corporation stock is RM26.50 per share. Earnings next year should be RM2 per share and it should pay a RM1 dividend. The P/E multiple is 15 times on average. What price would you expect for Yusof Corporation’s stock in the .. How many grams of sodium fluoride are in a toothpaste : the active ingredient in toothpaste is sodium fluoride, an anticavity agent. a 170 g tube of toothpaste lists the concentration of sodium fluoride a s0.24%. how many grams of sodium fluoride are in a toothpaste. Calculate the amount of hcn formed : If a sample of 0.188 grams of KCN is treated with an excess of HCL, calculate the amount of HCN formed, in grams. Compute the inimum temperature : calculate the inimum temperature at which this process will be spontaneous under standard conditions. Assume that Delta Ho and Delta So do not vary with temperature. Write a scheme funtion that takes a list : Write a Scheme funtion that takes a list and an atom as parameters and returns a list identical to its parameter list except with all top level instances of the given atom deleted

### Write a Review

#### Incremental cash flows

Discuss qualitatively how you might have incorporated the likely growth of digital photography in the sales projections developed above?  (Remember hindsight is 20-20.)

#### What are factors affecting the capital structure of company

Calculate the NPV and IRR for the project from the standpoint of the parent company. What are your recommendations for the proposal?

#### Writing a business plan to create financials

Writing a business plan to create financials as part of the business plan.  Section #1: Start-up expenses and capitalization.  Section#2: Financial Plan.

#### Change in bond price as the market yield changes

What is the Modified Duration of this bond when the market yield is at YTM and explain why and when Modified Duration under-predicts and over-predicts the change in bond price as the market yield changes.

#### Determine ratios relating to profitability and liquidity

Determine suitable ratios relating to profitability, liquidity, efficiency and gearing.

#### Result of studying personal financial planning

What financial strategies should you develop as a result of studying personal financial planning? What financial problems might you avoid?

#### Complete a preliminary analysis of the financial information

Complete a preliminary analysis of the financial information. Evaluate materiality based on the information you've been given and justify your calculation.

#### Capital budgeting project

Proposing a new venture to the management of your company

#### Consumers awareness and concerns

Collecting and using personal data: consumers' awareness and concerns

#### 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.

#### Cumulative nonvoting preferred stock

what if in L receives \$220 worth of P non-voting preferred stock (rather than P bonds) in exchange for his T bonds?

#### 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.