What is the current value of share of stock to investor

Assignment Help Financial Management

Reference no: EM13829408

General Cereal common stock dividends have been growing at an annual rate of 7 percent per year over the past 10 years. Current dividends are $1.70 per share. What is the current value of a share of this stock to an investor who requires a 12 percent rate of return if the following conditions exist?

A. Dividends are expected to continue growing at the historic rate for the foreseeable future.

B. The dividend growth rate is expected to increase to 9 percent per year.

C. The dividend growth rate is expected to decrease to 6.5 percent per year.

Reference no: EM13829408

Questions Cloud

Identify a few core values for effective facilitators : Identify a few "core values" for effective facilitators. which ones are "most" important to you and your organization

Scenario analysis: fmp : Scenario Analysis: FMP

Explains about the algorithm insertionsort : The insertion sort algorithm is stated below. Operation of insertion sort can be described as follows. The list at any moment is divided into two parts: sorted and unsorted. In each pass of the algorithm, the first element of the unsorted sub-list..

When should the organisers recognize revenue : Discuss the importance of Cost of Goods Sold(COGS) in this case - Let us say that the signatories will get a fixed fee for the effort, when would the organisers recognize the expense?

What is the current value of share of stock to investor : General Cereal common stock dividends have been growing at an annual rate of 7 percent per year over the past 10 years. Current dividends are $1.70 per share. What is the current value of a share of this stock to an investor who requires a 12 percent..

What is the effect on pretax earnings : Danville Bottlers is a wholesale beverage company. Danville uses the FIFO inventory method to determine the cost of its ending inventory. Ending inventory quantities are determined by a physical count. For the fiscal year-end June 30, 2011, ending in..

Description of an experience in which you were a facilitator : Write a brief description of an experience in which "you" were a facilitator. Consider whether it was a positive/negative experience and why-give examples

Case study: fiona stanley hospital : Case Study: Fiona Stanley Hospital

Calculate the price-cash flow ratio and market-book ratio : Review the requirements of the Chapter 3 Mini-Case, parts b through j. Then apply those requirements to do an analysis of Brinker International, which is a real company. Don't complete the minicase itself, just Brinker. Calculate the 2014 current and..

User Account

All Pages