What is connolly expected stock price in seven years

Assignment Help Financial Management

Reference no: EM131926996

1. Mountain Teas wants to raise $8.9 million to open a new production center. The company estimates the issue costs for legal and accounting fees will be $510,000. The underwriters have set the stock price at $26 a share and the underwriting spread at 8.35 percent. How many shares of stock does Mountain Teas have to sell to meet its cash need? (Round up to the next whole share.)

A. 428,414 shares

B. 394,897 shares

C. 369,315 shares

D. 392,144 shares

E. 401,909 shares

2. Connolly Co.'s expected year-end dividend is D1 = $6.00, its required return is rs = 11.00%, its dividend yield is 6.00%, and its growth rate is expected to be constant in the future. What is Connolly's expected stock price in 7 years, i.e., what is P7?

a. $141.04 b. $141.70 c. $140.71 d. $142.03 e. $141.37

Reference no: EM131926996

Questions Cloud

What is the bond price : The going interest rate (rd) is 8.5%, based on semiannual compounding. What is the bond's price?

Calculate the amount of loan payments : A bank has agreed to lend you $524,000 for a home loan. Calculate the loan principal. Calculate the amount of loan payments.

Explain why the present value of cash flow stream : Explain why the present value of cash flow stream, and the asset associated therewith; fluctuate in value with the level of interest rates in capital market.

What price does the investor pay for entire loan : A loan of nominal amount £200000 in bonds of nominal amount £100 is to be repaid by 20 annual drawings, What price does the investor pay for the entire loan?

What is connolly expected stock price in seven years : What is Connolly's expected stock price in 7 years, i.e., what is P7?

Find the value of european put option : Use the Black-Scholes formula to find the value of a European put option on the following stock:

What is the company wacc and cost of equity : Braxton Corp. has no debt but can borrow at 7.4 percent. If the firm converts to 60 percent debt, what is the company’s WACC? what will its cost of equity be?

What is price per share of equity under plan : An all-equity plan would result in 18,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan II?

Range of transfer prices within which both divisions profits : What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 5,000 parts this year.

User Account

All Pages