How much is this stock worth

Assignment Help Financial Management
Reference no: EM13880859

Suppose you buy a stock that paid a dividend this year of $4. This firm's dividends are not expected to grow at any point in time. Investors' required rate of return for this stock is 12%. How much is this stock worth?

a. $50.00

b. $53.00

c. $33.33

d. $59.44

Reference no: EM13880859

Questions Cloud

Classic retirement problem : This is a classic retirement problem. A time line will help in solving it. Your friend is celebrating her 40th birthday today and wants to start saving for her anticipated retirement at age 65. What amount must she deposit annually now to be able to ..
What is the projected dividend : Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 4 percent per year indefinitely. The required return on this stock is 10 percen..
The medical expense insurance-like organizations : The medical expense insurance-like organizations that eventually came to be called Blue Cross plans were initially run by
The market capitalization rate : MF Corp. has an ROE of 12% and a plowback ratio of 50%. If the coming year's earnings are expected to be $4 per share, at what price will the stock sell? The market capitalization rate is 14%. What price do you expect MF shares to sell for in three y..
How much is this stock worth : Suppose you buy a stock that paid a dividend this year of $4. This firm's dividends are not expected to grow at any point in time. Investors' required rate of return for this stock is 12%. How much is this stock worth?
Calculate the market capitalization rate : Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 6% per year. The risk-free rate is 5%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.66...
Find the optimal amounts of both inputs in the long run : find the optimal amounts of both inputs in the long run. Explain the large differences in inputs, output, and profit between the short run and the long run.
Discussion-business analytics and informed business decision : Many organizations felt that they needed to join the crowd and have an online presence, only to realize within a couple of years that the decisions were made in haste, which resulted in many companies filing for bankruptcy.
Describe the perspectives of the business community : Describe the perspectives of the business community toward the concept of workforce diversity.Give some data in healthcare management

Reviews

Write a Review

Financial Management Questions & Answers

  Options pertaining to home mortgage financing

You are given the following options pertaining to home mortgage financing: A) Loan amount $200,00, fixed rate 3.5%, 30 year term, closing costs = $7,000. APR _______________ B) Loan amount $200,000, Fixed rate 3.25%, 30 year term, closing costs = $11..

  Nominal interest on retirement savings

A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 8% nominal interest on retirement savings.

  Business finance task - capital budgeting

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

  Annual production quality makes the present value

Demand for Blow Pops has increased to the point where Tootsie Roll industries is considering buying a new plant solely devoted to Blow Pops. Tootsie receives a wholesale price of $0.45 for each Blow Pop delivered to its distributor. What annual produ..

  Draft an income statement and statement of cash flows

On January 3, 2013 Mandy MacMahaninvested $500,000 to open her first restaurant Alabama Barbecued Chicken in her hometown in Alabama.  Her town is known to be a trucker stop and a tourist destination as it has several antique and preserved landmarks ..

  Assume semi-annual coupon payments

What is the yield to maturity of a 23-year bond that pays a coupon rate of 8.25% a year, has a $1K par value, and is currently priced at $1, 298.05? Assume semi-annual coupon payments.

  Outstanding student loan with required payments

You have an outstanding student loan with required payments of $550 per month for the next four years. If you are required to continue making payments of $550 per month until the loan is paid off, what is the amount of your final payment? What effect..

  Investment is expected to produce annual cash flows

An investment costs $3,500 today. This investment is expected to produce annual cash flows of $1,200, $1,400, $1,300 and $1,100, respectively, over the next four years. What is the internal rate of return on this investment?

  Returns for various states of the economy

Manny and Irene will be retiring in fifteen years and would like to buy a Mexican villa. The villa costs $500,000 today, and housing prices in Mexico are expected to increase by 6% per year. If the account earns 10% per year, what is the amount of ea..

  Comparing the flexible budget to the static budget

A hospital outpatient department budgets for 1,500 visits per year. At the end of the year, the hospital has had 1,200 patient visits. When comparing the flexible budget to the static budget, which of the following will be true?

  Calculate value of a european call option

Given the following data: Stock price = $50; Exercise price = $45; Risk-free rate = 6%; variance = 0.2 ; Expiration = 3 months. Calculate value of a European call option:

  Recognizing and discuss inferences and faulty logic

Identifying and applying useful data and information and demonstrate logic to interpret data - Recognizing and discuss inferences and faulty logic.

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