What is the expected price of the stock

Assignment Help Financial Management
Reference no: EM13918521

A share of common stock has just paid a dividend of $2.00 that is D0= $2.00. If the expected long-run constant growth rate for this stock is 5 percent, and if investors require an 8 percent rate of return (Rs=8%), what is the expected price of the stock?

Reference no: EM13918521

Questions Cloud

Analyze a recent article from the wall street journal : You are required to read and analyze a recent article from the Wall Street Journal, each covering a different topic addressed in the course. You will then write a 1-page review of each article.
Coupon rate and yield to maturity : A 20 year corporate bond has a 9 percent coupon rate and a yield to maturity of 12 percent. Assume a face value of $1,000 and the payments are semiannual. What is the price? If this corporate bond had a call option on it which said the corporation co..
Company based on current economic and industry issues : You've just been hired onto ABC Company as the corporate controller. ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles. The company currently has annual sales of around $1.2 million, a 25% increase fr..
Determining the statement of cash flows : 1. The statement of cash flows is used for _____.
What is the expected price of the stock : A share of common stock has just paid a dividend of $2.00 that is D0= $2.00. If the expected long-run constant growth rate for this stock is 5 percent, and if investors require an 8 percent rate of return (Rs=8%), what is the expected price of the st..
Company purchased a building : The company purchased a building by issuing a four-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence.
Status of brand insistence : A product which has achieved the status of brand insistence: A. Is likely to spend more than its competitors in order to maintain its status. B. Has achieved a monopoly position with its consumers. C. Has a distinctive? Identity character?..
Software package tied to satellite global positioning system : Joshua Trucking has chosen a new software package tied to satellite global positioning system (GPS), in order to monitor its fleet. The software will be outdated after three years and replaced.
Determine the amount of net income that would be reported : Winters Co. purchased $48,000 of marketable securities on March 1, 2013. On the company's fiscal year closing date, December 31, 2013, the securities had a market value of $27,000. During 2013, Winters Co. recognized $12,000 of revenue and $5,000 of ..

Reviews

Write a Review

Financial Management Questions & Answers

  Four investments to consider-determine the IRR

You have four investments to consider. For each determine the IRR (or RIC) and determine if each project is acceptable with a MARR of 12%. Hint – you may want to consider PW(i) with 1%

  What was average annual risk premium on small-company stocks

What was the average annual risk premium on small-company stocks for the period 1926-2011?

  The discussion board db is part of the core of online

the discussion board db is part of the core of online learning. classroom discussion in an online environment requires

  What were the dividends paid by the firm

The year-end 2010 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $3,000,000 and retained earnings at $5,300,000. The next year, retained earnings were listed at $5,600,000. The firm’s net income in 2011 was $1,090,000...

  Differential between commercial loan rates and a banks cost

The differential between fixed- rate credit card rates and a bank's cost of funds typically varies over the interest rate cycle. What is this relationship, and why does it exist? Does the differential between commercial loan rates and a bank's cost o..

  Portfolio position can be hedged from overall stock market

If the S&P contracts have a multiplier of $500 and your $2.0M hedge fund stock portfolio has a beta of 1.2, then your portfolio position can be hedged from overall stock market volatility for 3 months by selling how many S&P futures contracts beginni..

  What is the clinic degree of operating leverage

Assume that the base case forecast is 10,000 visits. What is the clinic's degree of operating leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using the DOL combined with the percent changes in volume.

  Assume the company maintains its current operating capacity

Lloyd and Harry Limo Service, Co. is currently operating at 92% of fixed asset capacity. Fixed assets on the balance sheet are $593,000. Current sales are $640,000, and are projected to grow to $792,000. How many in new fixed assets are required to s..

  With the increasing use of digital payments and the

with the increasing use of digital payments and the decreasing use of cash payments enhanced digital security and

  BTIRR problem the property is specialty retail property

Unlevered BTIRR problem the property is a specialty retail property (which is not relevant to the solution). Mr. Beyer is planning to acquire the property, hold it for five years and then sell it at the end of the fifth year. The first year net opera..

  Three key figures on the cash flow statement

Which of the three key figures on the Cash Flow Statement is the most important for assessing the financial health of the business?

  Euro dollar futures price for a contract maturing

The 3 month euro dollar futures price for a contract maturing in 6 years is quoted as 95.20. The standard deviation of the change in the short-term interest rate in 1 year is 1.1%. Estimate the forward LIBOR interest rate for the period between 6.00 ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd