Investors expectation of the price

Assignment Help Finance Basics
Reference no: EM131097929

A share of stock with a beta of .82 now sells for $57. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 5%, and the market risk premium is 8%. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Reference no: EM131097929

Questions Cloud

Examine the case where roller coaster is defined as function : E19: Numerical Methods for Engineering Applications Spring 2016 - PROJECT 5. In class, we examined the case where the "roller coaster" is defined as a function f(x), with the single generalized position coordinate q = x. Unfortunately, this paramet..
Question regarding the net working capital : A firm has net working capital of $358, net fixed assets of $2,374, sales of $6,000, and current liabilities of $800. How many dollars worth of sales are generated from every $1 in total assets?
Question regarding the market risk premium : A share of stock with a beta of .83 now sells for $61. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 6%, and the market risk premium is 9%.
Discuss some of the benefits of using group policy : Pick on of the policy that is available in Windows 2012 Server and explain it. Why do you think this policy is an important one to implement in an organization? Discuss some of the benefits and disadvantages of using group policy in an organizati..
Investors expectation of the price : If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year? (Do not round intermediate calculations. Round your answer to 3 decimal places.)
Market is served by profit-maximizing monopoly : Consider a market demand curve that can be expressed as P = 300 - 3 Q. Each of the firms currently serving the market has a total cost function of the form C = 40 q so MC = ATC = 40. There are no fixed costs. If the market is served by a (short-run) ..
Current consumption expenditures : Look up the difference between “current consumption expenditures,” “current transfer payments,” and “interest payments.” What has been happening to each (and both together) as a fraction of GDP from 1950-present? Do they differ (conceptually) from “G..
Write paper on legal and ethical issues concerning learning : Compose a research paper on the legal and ethical issues concerning online learning. The paper needs to address/include legal and ethical issues from teachers perspective as well as a student's perspective.
Federal government income comes from the sales tax : Explain why: Government expenditure and investment has remained fairly constant as a fraction of GDP since 1950, even as transfers have risen. Explain why: Most of state government revenue comes from the income tax, and most Federal government income..

Reviews

Write a Review

Finance Basics Questions & Answers

  How do u.s. laws define insider trading

How do U.S. laws define insider trading?

  Does the project annual worth indicate

At a corporate MARR of 10% per year, does the project Annual Worth indicate it will make at least the MARR?

  Firm gives a stock option to employees

Which of the following is an acceptable method of accounting for employee stock options and  Which is the date when a firm gives a stock option to employees?

  Calculate the net present value for the two options

Show by calculation the net present value for the two options (selling cars, mileage fees). Also, according to NPV suggest which alternative you advise your friend to choose

  Put together a powerpoint presentation with 12ndash15

put together a powerpoint presentation with 12ndash15 slides that can be used for both internal purposes and when you

  What is the fixed monthly payment that would be required

Suppose that you buy a new car that costs $30,000 and you are able to pay $3,000 of the cost in cash and borrow the remainder from a bank that offers a conventional amortizing loan with monthly payments.

  What types of risks should bondholders

1. What types of risks should bondholders be aware of and how do these affect bond prices and yields? 2.  How much would you pay for a Treasury bill that matures in 182 days and pays $10,000 if you require a 1.8%

  At the end of each year for the next ten years you will

at the end of each year for the next ten years you will receive cash flows of 50. the initial investment is 320.

  What was its charge for depreciation and amortization

Income Statement: Pearson Brothers recently reported an EBITDA of $7.5 million and net income of $1.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?

  Significant increase in shareholder activism in recent years

We've seen a significant increase in shareholder activism in recent years, particularly from large institutional shareholders.

  The market value of debt is 300000 the market value of

patrick company expects to generate free-cash of 120000 per year forever. if the firms required return is 12 percent

  What would the value of each of these bond when the going

crawford inc. has two bond issues outstanding both paying the same annual interest of 55 called series a and series b.

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