Shares of common stock outstanding with current price

Assignment Help Financial Management
Reference no: EM13944523

The company has 10 million shares of common stock outstanding with a current price of $15.00 per share. The stock exhibits a constant growth rate of 8 percent. The last dividend (D0) was $.90.

What is the Current Value?

Reference no: EM13944523

Questions Cloud

Contribution made to not-for-profit healthcare organization : A contribution made to a not-for-profit healthcare organization that the donor specifies is to be used only for the provision of charity care would most likely be classified as 1) unrestricted 2)temporarily restricted 3)permanently restricted4) board..
The portfolio be after the purchase of the alpha stock : Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 17...
What are the firms current capital structure weights : Suppose that Papa Bell, Inc.’s, equity is currently selling for $56 per share, with 4.1 million shares outstanding. Assume the firm also has 18,000 bonds outstanding, and they are selling at 95 percent of par. What are the firm’s current capital stru..
Maximum cost nally would be willing to pay for project : Nally, Inc., is considering a project that will result in initial aftertax cash savings of $6.5 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. What is the maximum cost Nally would be wi..
Shares of common stock outstanding with current price : The company has 10 million shares of common stock outstanding with a current price of $15.00 per share. The stock exhibits a constant growth rate of 8 percent. The last dividend (D0) was $.90. What is the Current Value?
Difference in approach of international financial accounting : What is the major difference in the approach of international financial accounting and U.S. GAAP accounting? What are the advantages of disadvantages of each?
Stock is expected to pay a year-end dividend : A stock is expected to pay a year-end dividend of $2.00, i.e., D1 = $2.00. The dividend is expected to decline at a rate of 5% a year forever (g =-5%). The constant growth model cannot be used because the growth rate is negative. The company's expect..
Bonds outstanding-common stock outstanding : Bonds Outstanding: 8,000 bonds selling at 97 with a face value of $1,000, coupon rate of 4.5%, annual coupons, and 22 years to maturity. Common Stock Outstanding: 10 million shares outstanding, price of $94, risk-free rate of .005, expected market re..

Reviews

Write a Review

Financial Management Questions & Answers

  External equity financing

Gardial GreenLights, a manufacturer of energy efficient lighting solutions, has had such success with its new products that it is planning to substantially expand its manufacturing capacity with a $15 million investment in new machinery.

  Inventory turnover must be greater than five times annually

Discuss reasons why banks might choose to include the following covenants in a loan agreement: a. Cash dividends cannot exceed 60 percent of pretax income. b. Interim financial statements must be provided monthly. c. Inventory turnover must be greate..

  What is the cost of equity

Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate.3) What is the cost of equity?

  What is the expected return for this asset

Assume that next year, we can have three possible states of world with the following probabilities of occurring: 20%, 45%, and 35%. The returns of an asset in each state are 18%, 5%, and -8%. What is the expected return for this asset?

  Historical returns-expected and required rates of return

Historical Returns: expected and Required Rates of Return You have observed the following returns over time: Assume that the risk-free rate is 5% and the market risk premium is 6%. Do not round intermediate calculations. What is the beta of Stock X?

  Share of preferred stock pays a constant dividend

Assume a share of preferred stock pays a constant dividend of $1.15. If the required return is 5%, what is the expected price of this preferred stock?

  Utility is valued using a discount rate

Star Light & Power increases its dividend 2.9 percent per year every year. This utility is valued using a discount rate of 9 percent, and the stock currently sells for $52 per share. If you buy a share of stock today and hold on to it for at least th..

  Considering the installation of an irrigation system

After a long drought, the manager of Long Branch Farm is considering the installation of an irrigation system which will cost $100,000. It is estimated that the irrigation system will increase revenues by $20,500 annually, although operating expenses..

  Non constant growth-what is the value of the stock

Micro Tech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Micro tech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from to..

  Evaluate stockholder required return

If the appropriate discount rate is 12% and the tax rate is 40%, which copier should be selected?  Why?  Be sure to quantify your answer.

  Capital expenses-debt and debt principal payments

Mary has EAT, depreciation expense, capital expenses, debt and debt principal payments of $2m, $2.8m, $1.3m, $40m and $1.5m respectively. Moreover, Mary had operating profit of $2.5 million and its assets went from a total of $35 to $38 million. Furt..

  Changes in sales cause changes in profits

Changes in sales cause changes in profits. Would the profit change associated with sales changes be larger or smaller if a firm increased its operating leverages?  Should the asset investment and financing decisions be jointly determined, or should e..

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