Stock value and dividend initiation-compute current value

Assignment Help Financial Management
Reference no: EM131350525

Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.95 per share in 2 years. This dividend will grow at 13 percent indefinitely. Using a 15 percent discount rate, compute the current value of this stock.

Reference no: EM131350525

Questions Cloud

What is the most money you can make on the position : The common stock of the BDF Corporation has been trading in a narrow range around $100 per share for months, and you believe it is going to stay in that range for the next month. What options strategy, using both put and call options, could you use t..
Deposit with no outstanding checks or uncleared deposits : You have $49,762 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $11,618 and then deposit a check for $7,880. What is your net float?
What is the total rate of return on the bond : Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity. Find the bond's price today and 6 months from now after the next ..
Compute the current value : Compute the current value An enterprise buget for soybeans shows a yield of 46 bushels, a selling price of $11.80 per bushel, and total cost of $460.20 per acre. What is the break-even yield?
Stock value and dividend initiation-compute current value : Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.95 per share in 2 years. This dividend will grow at 13 percent indefinitely. Using a 15 percent discount rate, compute the current valu..
Write a summary of your communication quiz score : Write a summary of your communication quiz score, describing your strengths and weaknesses and how you plan to develop your communication skill set. Additionally, what aspects of communication that were not covered by the quiz do you think are im..
Why you believe the action is required for the citations : Based on the Citation and Notification of Penalty letter you received in Unit III, prepare a document that summarizes at least five actions you would take as soon as possible after you reviewed the letter. For each of the actions, you must state ..
What are key words and how do they help with searches : What are "key words" and how do they help with searches? What key words did you use for your searches? What are "search limiters" and how do they help with searches? What search limiters did you use for your searches?
Percentage with one decimal place : Express as a percentage with one decimal place. Do not include the percent sign. If your calculator says 0.7543, you would answer 75.4.

Reviews

Write a Review

Financial Management Questions & Answers

  What is coupon rate for bond

To calculate the number of years until maturity, assume that it is currently May 2013. Rate Maturity Mo/Yr Bid Asked Chg Ask Yld ?? May 18 103.5605 103.6487 +.3158 2.549 5.774 May 23 104.5095 104.6552 +.4425 ?? 6.218 May 33 ?? ?? +.5548 4.251 Require..

  Cash flows to concisely convey the maximum information

The Blandings Home construction company purchased a new crane for $350,000 this year. It sold the crane for $80,000. At the time it had a net book value of $20,000. Constrict the Cash Flow from investing activities section of the the statement of cas..

  Current yield and capital gains yield on the bonds

Meade Corporation bonds mature in 6 years and have a yield to maturity of 8.5 percent. The par value of the bonds is $1,000. The bonds have a 10 percent coupon rate and pay interest on a semiannual basis. What are the current yield and capital gains ..

  What is the? firms cost of new? equity

Your? company’s stock sells for? $40 per? share, its last dividend? (D0) was? $2.00, its growth rate is a constant 5? percent, and the company will incur a flotation cost of? $4 per share if it sells new common stock. What is the? firm’s cost of new?..

  Find the profits for the possible stock prices on august 1

Use the spreadsheet to find the profits for the possible stock prices on August 1. Generate a graph and use it to estimate the breakeven stock price at the end of the holding period.

  Invest in the zero-coupon bond-how much in the perpetuity

You need to create a portfolio with duration of 8 years. You can use a 5 year zero-coupon bond and a perpetuity which pays $100 each and every year forever and has yield of 10%. How much of the portfolio value in percentage you would have to invest i..

  What is implied annual interest rate on futures contract

A Coca-Cola bond futures contract settles at 105-8. What is the present value of the Coca-Cola futures contract?What is the implied annual interest rate on the futures contract? Calculate the new value of the futures contract if interest rates increa..

  What is the total market value of debt-aftertax cost of debt

Jiminy's Cricket Farm issued a 30-year, 7.6 percent semi annual bond 6 years ago. The bond currently sells for 92.5 percent of its face value. The book value of this debt issue is $93 million. What is the total market value of debt? What is the after..

  The impact of major eents from the recent financial

The impact of major eents from the recent financial crisis on credit default swaps

  Computer system will require an initial outlay

A new computer system will require an initial outlay of $17,000, but it will increase the firm’s cash flows by $3,400 a year for each of the next 7 years. Calculate the NPV and decide if the system is worth installing if the required rate of return i..

  Paid dividend per share

Could I Industries just paid a dividend of $1.05 per share. The dividends are expected to grow at a 20 percent rate for the next 6 years and then level off to a 5 percent growth rate indefinitely. If the required return is 13 percent, what is the val..

  How would this change the value of your share

I own 20 shares (for a firm total of 100 shares) and I am trying to fire the management. To appease me, the management has offered to purchase my 20 shares at $9 pershare. How would this change the value of your share?

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