What growth rate is expected for company stock price

Assignment Help Financial Management

Reference no: EM131055015

1. The stock price of Tomboy, Inc. is $58.78. Investors require a 8.6 percent rate of return on similar stocks. If the company plans to pay a dividend of $3.14 next year, what growth rate is expected for the company’s stock price?

Enter rate in percents, to three decimal places.

2. You anticipate that XSensors Co. will pay a constant dividend of $2.75 each year for the next 10 years. After that, the dividend will increase to $4.89 and hold steady for another 10 years. After that, you expect the dividend will start increasing every year at a constant rate of 2.6 percent per year, forever. Your discount rate for this stock is 13.3 percent. How much are you willing to pay for this stock today?

Reference no: EM131055015

Questions Cloud

Annual dividend-required rate of return : Revelation Co. just paid its annual dividend of $3.3 per share. The company has been reducing the dividends by 7.9 percent each year. How much are you willing to pay today to purchase stock in this company if your required rate of return is 14.1 perc..

Identify and defend the type of program evaluation : Identify and defend the type of program evaluation that would best align with and assess the performance of the organization you referenced in the Module 2 assignment. Include specific examples from the organization's mission statement and program..

Breach of an oral lifetime contract : Approximately one year later, at age 47, Oker was fired w/o cause and sued for breach of an oral lifetime contract. The company asserted the Statute of Frauds. Who wins?

Botswana development process : Do you consider Botswana's development process to have been a success? Why or why not? What specifically contributed to its development in the first ten years of independence?

What growth rate is expected for company stock price : The stock price of Tomboy, Inc. is $58.78. Investors require a 8.6 percent rate of return on similar stocks. If the company plans to pay a dividend of $3.14 next year, what growth rate is expected for the company’s stock price?

Economic concepts from previous modules : Do you think patent licenses should expire? Be sure to support your argument with references and economic concepts from previous modules as well.

Illustrate a consumer preferences : If there are only two goods, it is possible to illustrate a consumer's preferences over them with an indifference map. Draw an indifference map with three indifference curves.

Would you say this protein is homologous to the query : The DCC protein from human is most closely related to the DCC protein from what other mammal?

Find the mean output for each fertilizer : Table gives the output for 8 years of an experimental farm that used each of 4 fertilizers. Find the mean output for each fertilizer and the grand mean for all the years and for all four fertilizers

User Account

All Pages