What is the premium for growth on the stock

Assignment Help Financial Management
Reference no: EM131556116

Amax Inc. has a PE ratio of 25. It is expected to earn $1.50/ share in year 1. If investors expect a return of 15% per year on the stock, what is the premium for growth on the stock?

Reference no: EM131556116

Questions Cloud

What is sustainable growth rate : Assuming the following ratios are constant, what is the sustainable growth rate?
What is this project internal rate of return : If the firm has a marginal tax rate of 40 percent, what is this project’s internal rate of return?
How much would your investments be worth today : How much would your investments be worth today? What is your average return (IRR)?
What was the addition to net working capital : what was the addition to net working capital or NWC?
What is the premium for growth on the stock : what is the premium for growth on the stock?
What is sage target debt-equity ratio : The tax rate is 30 percent. What is Sage's target debt-equity ratio?
Dividend payment-what is the capital gains yield : The dividends are anticipated to maintain a 6 percent growth rate, forever. If the stock currently sells for $40.77 per share, what is the capital gains yield?
What are the annual incremental net cash flows : The depreciation of the new equipment will be $73,000 per year. What are the annual incremental net cash flows?
Describe multi-level modeling : Describe multi-level modeling. Using formulas show the connection between multi-level modeling and regression analysis.

Reviews

Write a Review

Financial Management Questions & Answers

  What will the percentage change in operating cash flow be

At an output level of 61,000 units, you calculate that the degree of operating leverage is 2. The output rises to 66,000 units. What will the percentage change in operating cash flow be?

  What is the project internal rate of return

What is the project’s internal rate of return? If the cost of capital is 14.5% would you accept the project?

  Evaluating two capital investments

Better Health Inc. is evaluating two capital investments, each of which requires an up-front (Year 0) expenditure of $1.5 million. The projects are expected to produce the following net cash inflows: What is each project's NPV if the opportunity cost..

  Pretax or aftertax cost of debt

Jiminy's Cricket Farm issued a 30-year, 10.6 percent semiannual bond 6 years ago. The bond currently sells for 85 percent of its face value. The company’s tax rate is 38 percent. What is the pretax cost of debt?  Which is more relevant, the pretax or..

  What is the total mortgage interest payment

Calculate the required monthly mortgage payment for Mr. Davidson. what is the total mortgage interest payment that he can consider for deduction?

  Discuss how bonds are sold on the secondary market

What is a bond's yield to maturity? How does the price paid for a bond affect its yield to maturity?- Discuss how bonds are sold on the secondary market.

  Company need to raise to finance the extra dividend payment

What is the price of Consolidated stock? How much new equity capital will the company need to raise to finance the extra dividend payment?

  What is the present value of a zero-coupon bond

What is the present value of a zero-coupon bond with five years maturity, a nominal value of $1,000 and a discount rate of 6%?

  Plans on returning its dividend to prerecession levels

Recreational Pharmaceuticals Inc. plans on returning its dividend to pre-recession levels of $1.60 a share next year, which you expect to grow at 12% for the three years after that, 8% for two years after that, and 4% thereafter. Assuming the stock i..

  Shares of sirius satellite radio

You would like to buy shares of Sirius Satellite Radio (SIRI). The current ask and bid quotes are $3.98 and $3.95, respectively. You place a market buy order for 540 shares that executes at these quoted prices. How much money did it cost to buy these..

  Foreign car owners obtained a forty percent response rate

A survey of foreign car owners obtained a forty percent response rate. Sixty six percent indicated plans to purchase another foreign car at some time in future

  Real estate law and paralegal studies

For what kind of problems should the paralegal look? What system of recording in used in Oakland County, Michigan?

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