Determine the expected price of the stock

Reference no: EM1366490

Allegheny Publishing's stock is expected to give a year end dividend, D1, of $4. The dividend is expected to increase at a constant rate of 8% per year, and the stock's required rate of return is 12%. Given this information, what is the expected price of the stock, eight years from now?

a. $200.00
b. $185.09
c. $171.38
d. $247.60
e. $136.86

Reference no: EM1366490

Questions Cloud

Diabetes-asthma-high blood pressure : Describe care for at least one form of chronic care, such as diabetes, asthma, or high blood pressure.

Semi-strong efficient market : If the stock market is semi-strong efficient, which of the given statements is correct? All stocks should have the same expected returns; however, they may have different realized returns.

What extent is merit determined by opportunity : What extent is merit determined by opportunity and Explain whether you agree that wealth and background, among other things, can affect one's ability to achieve and weather such advantage are determinative of success?

Supply and demand of ebay : Go to the internet auction site eBay at www.ebay.com and pick the category Jewelry and Watches, followed by Loose Diamonds and Gemstones, and then Diamonds, Natural.

Determine the expected price of the stock : Allegheny Publishing's stock is expected to give a year end dividend, D1, of $4. The dividend is expected to increase at a constant rate of 8% per year, and the stock's required rate of return is 12%.

Facts on healthcare reform law : Research the facts on the Healthcare Reform law. Give an opinion based on facts whether you feel the reform is positive or negative or neutral.

Advice to a prospective expatriate : What advice would you give to a prospective expatriate regarding questions to ask before accepting the assignment?

Evaluate groups training program : Show what are the possible issues with a training group that contains only employees in their 20s and 30s and how would you ensure that you are complying with relevant employment regulations in this case

Determine the firm cost of new equity : Your Corporation stock sells for $50 per share, its last dividend was $2.00, its growth rate is a constant 5%, and the firm will incur a floating rate cost of 15% if it sells new stock.

User Account

All Pages