The required return equal to the expected return

Assignment Help Financial Management

Reference no: EM131519480

A stock is trading at $85 per share. The stock is expected to have a year-end dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate gL throughout time. The stock's required rate of return is 10% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL? Round the answer to three decimal places.

Reference no: EM131519480

Questions Cloud

Value at risk for the portfolio : What is the five day 98% value at risk for the portfolio? Explain what the number means?

Array of person-pointers : Write a separate function (not part of the Person class) called stdDev that takes two parameters - an array of Person-pointers and the size of the array.

Properties of an ordinary annuity : The following are properties of an ordinary annuity, except;

Calculate the net present value for each project : Calculate the net present value for each project. Does the new assumption change the investment decision?

The required return equal to the expected return : assume the market is in equilibrium with the required return equal to the expected return. What is your forecast of gL?

Calculate the required return of hannah stock : You are currently only invested in the Natasha Fund? (aside from? risk-free securities). Calculate the required return of Hannah stock. Is your broker? right?

Compute present value : Compute the present value of a $100 investment made 6 months, 5 years, and 10 years from now at 10 percent interest.

What are some problems with a typical stock option plan : Describe how a typical stock option plan works. What are some problems with a typical stock option plan?

How much would you estimate bond price to change in dollars : If you think that interest rates will change to 6.2%, how much would you estimate the bond price to change in dollars?

User Account

All Pages