Find intrinsic stock value today

Assignment Help Financial Management
Reference no: EM131347672

Suppose the company is facing a fast growth of 22% per yaer for the next 4 years. After that the growth becomes constant 0%. Company's beta is 1.2; market risk premium is 5.5% and risk-free rate is 3% Last dividend (Do) is $1.25 per share.

Find

Horizon stock price at time 4;

Intrinsic stock value today.

Reference no: EM131347672

Questions Cloud

Find the entire office suite flooded from overhead sprinkler : Estimate of Loss. You are the practice manager for a four-physician office. You arrive on Monday morning to find the entire office suite flooded from overhead sprinklers that malfunctioned over the weekend. Water stands ankle-deep everywhere. How wou..
Zero coupon treasury bonds for years : On March 11, 20XX, the existing or current (spot) 1-, 2-, 3-, and 4-year zero coupon Treasury security rates were as follows: 1R1 = 0.55%, 1R2 = 1.15%, 1R3 = 1.55%, 1R4 = 1.70% Using the unbiased expectations theory, calculate the 1-year forward rate..
Calculate the monthly payment and amount financed : Find a vehicle for sale online that you would like to buy then calculate the Monthly Payment (MP), Amount Financed (AF), Finance Charge (FC), and Deferred Payment Price (DPP).
Best for ralph from effective-interest-rate point of view : Hank Scorpio is considering borrowing $20,000 for a year from a bank that has offered the following alternatives: Which alternative is best for Ralph from the effective-interest-rate point of view?
Find intrinsic stock value today : Suppose the company is facing a fast growth of 22% per yaer for the next 4 years. After that the growth becomes constant 0%. Company's beta is 1.2; market risk premium is 5.5% and risk-free rate is 3% Last dividend (Do) is $1.25 per share. Find Horiz..
Common stock of two particular firms : Your research has determined the following information about the common stock of two particular firms.  What type of risk are we considering here? Is there anything that can be done to reduce this type of risk? If so, what? When is this type of risk ..
Value of a right-rights-on-price : In the formula, Value of a right = Rights-on-price - Issue price Number of rights to buy at issue price + 1 which of the following assumptions is required?
What proportion of rights were actually exercised : The Archway Corporation produces PC's. It has grown rapidly and needs to raise $45 million in new equity. It has decided to do this using a rights issue.  Suppose the company anticipates all rights will be exercised but in fact they are not. If the e..
Likely ex-rights price assuming all rights are exercised : The Buppence Company is making a rights issue at an issue price of $10 for one new share for every four shares currently held. If the stock price before the issue was $15, what is the likely ex-rights price assuming all rights are exercised?

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the projected after tax operating cash flow

Current liabilities are expected to increase to $17 million. Compute the projected after-tax operating cash flow for Steber during the coming year.

  Where in the process did the burger king fry flop

Go through the strategic process 5 steps for the Burger King fry. (Vision, Goals/Objectives, Crafting Strategy, Implementation Execution, Assess) Where in the process did the Burger King fry flop? How did MD’s combat the Burger King fry strategy?

  What is the payback period of the ice cream cart

It will cost $3,600 to acquire a small ice cream cart. Cart sales are expected to be $2,800 a year for four years. After the four years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What is the pa..

  What is the variance and expected return of the portfolio

Consider the following information: Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom 0.15 0.40 0.50 0.30 Good 0.60 0.16 0.10 0.09 Poor 0.20 − 0.02 − 0.05 − 0.03 Bust 0.05 − 0.18 − 0.25 − 0.1..

  What change in NWC occurs at the end of year one

You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $420 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in ..

  What is the year-end 2008 balance in retained earnings

Statement of Retained Earnings Triplette, Corp. began the year 2008 with –$5 million in retained earnings. The firm earned net income of $10 million in 2008 and paid $2 million to its preferred stockholders and $1 million to its common stockholders. ..

  What will be the price of the company shares

Boondocks Inc. has 30 million shares outstanding at a price of $40 each. The company is planning a seasoned equity offering (SEO). It will issue an additional 10 million shares at a subscription price of $32.  How many new shares can she buy in the S..

  What is the present value of this growing perpetuity

You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $24,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.02 annually. If you use ..

  Used in net present value calculation to compensate for risk

A property developer is planning to build a new pay car park. The project will cost $20,500 and generate net cash inflows of $5,000 each year for five years. The expected return on the market portfolio is 15% and the risk-free rate is 6%. The firm's ..

  Determine the estimated after-tax cash ?ow

Tampa Electric Company (TECO) is planning a major upgrade in its computerized demand management system. In order to accommodate this upgrade, a building will be constructed on land already owned by the company. The building is estimated to cost $1.8M..

  Determine the composition of the exiting liquid stream

Determine the composition of the exiting liquid stream; the ratio of the actual Ls/Gs is larger than the minimum Ls/Gs.

  Mainlines net income-total profit margin and cash flow

Assume that Mainline Homecare, a for-profit corporation, had exactly the same situation as reported earlier (Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. What were Mainlines' net income, total profit margin, an..

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