Method used in valuing common stock

Assignment Help Financial Management
Reference no: EM131306623

1. Which of the following is not a method used in valuing common stock?

Dividend Growth Model

Free cash Flow Valuation Model

Market Multiples

Residual Dividend Model

2. If the risk-free rate is 4%, the market risk premium is 6%, what is the required rate of return on a stock with a beta of 1.5?

2%

10%

13%

11.5%

Reference no: EM131306623

Questions Cloud

Create an internet marketing plan for your event : Create an Internet Marketing Plan for your event or to market yourself as an event planner for your final project topic. You may refer to general guidelines described this week's assigned text readings.
Install the equipment necessary to start production : Guthrie Enterprises needs someone to supply it with 165,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $2,300,000 to install the equipmen..
What is the total savings you could accrue at retirement : If you went to fewer movies and reduced expenses by $50 monthly, how much extra could you save by retirement?
What is the balance in the retirement account : A retirement account is established with $500000. Annual payments are recieved at the end of each year for the next 20. the account earns an annual effective rate of intrest of 9.2%. the first payment is of size P and each succeeding payment is incre..
Method used in valuing common stock : Which of the following is not a method used in valuing common stock? If the risk-free rate is 4%, the market risk premium is 6%, what is the required rate of return on a stock with a beta of 1.5?
Were any major purchases influenced by psychological forces : Review your largest cash outflows over the last year and identify your largest expenses.- Were any of your major purchases influenced by psychological forces such as peer pressure?
Explain steps to minimize challenges in future research : Explain Steps to minimize challenges in future research. Suggested future research based on your research results, challenges, and implications.
Determine any contract clauses and contingencies : Before tendering as a contractor supplying materials and equipment specified by the client, state briefly some checks that should be made prior to compiling the tender in order to determine any contract clauses, contingencies or unforeseen circums..
Correct process for resolving consumer complaints : Which of the following is the correct process for resolving consumer complaints? The Game Stop COrporation will pay an annual dividend of 1.92 next year. The company has increased its dividend by 3.5 percent a year for the past twenty years and expec..

Reviews

Write a Review

Financial Management Questions & Answers

  Determine the present value

Determine the present value of $5,000 is received in the future at the end of each indicated time. In each of the following situations 5% for 10 years 7% for 7 years 9% for 4 years

  Calculate the cost of equity using the DCF method

Epley Industries stock has a beta of 1.30. The company just paid a dividend of $.30, and the dividends are expected to grow at 4 percent. The expected return on the market is 13 percent, and Treasury bills are yielding 5.1 percent. The most recent st..

  Calculate the value of consumer and producer surplus

Using graph paper, plot the demand and supply schedules on the same graph. - Determine Australia's market equilibrium price and quantity for TV sets. Calculate the value of consumer and producer surplus.

  What is the expected rate of return on stock with beta

The risk-free rate of return is 4.0 percent and the market risk premium is 11 percent. What is the expected rate of return on a stock with a beta of 1.7? 17.80 percent 8.90 percent 11.35 percent 22.70 percent 18.70 percent

  Value against an appreciation of the us exporter currency

Explain how Ghanaian importer can protect its value against an appreciation of the US exporter currency. Show calculations to support your explanation

  What is the amount of the operating cash flow

United Enterprises paid $12,000 in dividends and $21,300 in interest over the past year. Sales totalled $139,700 with costs of $101,400. The depreciation expense was $10,500. The applicable tax rate is 34 percent. What is the amount of the operating ..

  What is the company target debt-equity ratio

Fama's Llamas has a weighted average cost of capital of 12.5 percent. The company's cost of equity is 15.5 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 33 percent. What is the company's target debt-equity ratio?

  Growth rate in dividends is expected to be a constant

Great Pumpkin Farms just paid a dividend of $3.40 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for ..

  Evaluating risk and return

Stock X has a 10.5% expected return, a beta coefficient of 1.0, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 30.0% standard deviation. Calculate each stock's coefficient of va..

  What are yorgis monthly payments on the mortgage

Yorgi obtained a $250,000 mortgage with a fixed rate of 5.6% and a 20-year maturity. -What are Yorgi's monthly payments on the mortgage?

  What must the beta be for the other stock in your portfolio

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.02 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

  What is the effective interest rate on the libor loan

Dr. Ruth is going to borrow $8,400 to help write a book. The loan is for one year and the money can either be borrowed at the prime rate or the LIBOR rate. Assume the prime rate is 8 percent and LIBOR 1.3 percent less. Also assume there will be a $48..

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