What is the current value of the stock to coley

Assignment Help Financial Management

Reference no: EM131338435

Sports Novelties, Inc., has experienced an explosion in demand for its feathered football novelties. The firm currently (time 0) pays a dividend of $0.25 per share. This dividend is expected to increase to $0.75 per share one year from now.

It is expected to grow at a rate of 15 percent per year for the following seven years. Coley, a naive investor, seeks your advice regarding the current value of this stock. Coley plans to purchase this stock today, if the price is right, and to hold it for three years.

He believes that the stock will increase in value to $30 at the end of four years. What is the current value of this stock to Coley if he requires a 20 percent rate of return on stocks of this risk level?

Reference no: EM131338435

Questions Cloud

What value would he place on the stock today : If Brown plans to hold the stock for two years and requires a rate of return of 20 percent on his investment, what value would he place on the stock today?

Career goals and assessing the mshrm program : Develop a timeline for your most important career goal(s) over the next five (5) years. Describe any formal training, certifications, or other skillsets you must obtain in order to achieve these goals.

What is linear speed in miles per hour of a point on tire : Suppose the wheel turns at a constant rate of 2.75 revolutions per second. What is the linear speed in miles per hour of a point on the tire?

Highlight the area of most importance : Create a timeline of annual activity of labor/management collective bargaining from 1978 until 2009, providing a short synopsis of mergers, new carriers and company departures from the air transport sector. Highlight the area of most importance.

What is the current value of the stock to coley : Sports Novelties, Inc., has experienced an explosion in demand for its feathered football novelties.- What is the current value of this stock to Coley if he requires a 20 percent rate of return on stocks of this risk level?

What are two of innovations : Innovative long-term care services that meet the diverse medical needs, personal desires, and lifestyle choices of older Americans have made important strides over the years. What are two of these innovations? How have these innovations impacted t..

Discuss about the article given below : Develop a final paper that explores in more depth some issue or aspect of the period in East Asian history that we cover in this course. Although the particular topic is open, students will need to base their research on recent academic scholarsh..

How a business can earn a positive gross profit : Explain in detail how a business can earn a positive gross profit on its sales and still have a net loss. Do you think this happens often? Explain your answer.

Find the linear velocity of a point on each planet''s equator : Compare the linear velocity of a point on the equator of Mars with a point on the equator of Earth.

User Account

All Pages