What is the required rate of return

Assignment Help Financial Management
Reference no: EM131027024

Janlea Co. had total net earnings of $127,000 this past year and paid out 30 percent of those earnings in dividends. There are 100,000 shares of stock outstanding at a current market price of $11.62 a share. If the dividend growth rate is 5.6 percent, what is the required rate of return?

Reference no: EM131027024

Questions Cloud

What is the portfolios expected return : A portfolio is invested 18 percent in Stock G, 58 percent in Stock J, and 24 percent in Stock K. The expected returns on these stocks are 9 percent, 15 percent, and 19 percent, respectively. What is the portfolio's expected return?
Beta coefficients you spot a number of stocks : Looking at a list of beta coefficients you spot a number of stocks as possible buys for your new stock portfolio. You have $80,000 to invest. You have decided to have just three stocks in your portfolio (this will make it easier to follow than a port..
Decided to sell some new bonds : In 2007 Carnival Cruise Lines decided to sell some new bonds (something about fixing a big ship). They sold the bonds for $1,000 (face value) with a 20 year maturity and an 7% coupon. what should they expect to receive for it in the secondary market?
Venture capitalist is planning to invest in a project : A venture capitalist is planning to invest in a project that will cost 20 million at the beginning and will provide cash flows of 10 million per year for the first two years and 8 million per year for the next two years. Thereafter, the project is te..
What is the required rate of return : Janlea Co. had total net earnings of $127,000 this past year and paid out 30 percent of those earnings in dividends. There are 100,000 shares of stock outstanding at a current market price of $11.62 a share. If the dividend growth rate is 5.6 percent..
Statements related to preferred stock : Which of the following statements related to preferred stock is correct? Preferred shareholders normally receive one vote per share of stock owned. Preferred shareholders determine the outcome of any election that involves a proxy fight. Preferred sh..
Dividends are expected-what is current value of one share : Nu-Tech stock's last annual dividend was $1.10 a share. Dividends are expected to increase by 25 percent for the next two years and then increase at a constant 4 percent annually. The required return on this high-risk stock is 18.5 percent. What is t..
What was the rate of price appreciation on the stock : Grenville common stock had a 12.25 percent rate of return last year. The fixed annual dividend is $.65 a share, which equates to a dividend yield of 1.6 percent. What was the rate of price appreciation on the stock?
Making equal monthly deposits into your account : You are planning to retire and have decided: you will retire in 33 years and would like to have $7,000 per month as retirement income for 30 years of retirement. How much will you need to have when you retire to be able to withdraw the desired $7,000..

Reviews

Write a Review

 

Financial Management Questions & Answers

  First amendment to the constitution is freedom of speech

One of the rights specifically granted by the first amendment to the constitution is freedom of speech. While this right is usually recognized as belonging to individuals the first amendment also encompasses commercial speech. Provide a definition of..

  Rate of return on stock using capital asset pricing model

Given the following data for a stock: beta = 1; risk-free rate = 4%; market premium = 6%. Calculate the expected rate of return on this stock using the capital asset pricing model.

  Explain the company wishes to know the market value

An oil company has paid $100,000 for the right to pump oil on a plot of land during the next three years. A well has already been sunk and all other necessary facilities are in place. The land has known reserves of 60,000 barrels. The company wish..

  Interest rates-foreign exchange rates and inflation rates

Financial time series, such as stock prices, interest rates, foreign exchange rates, and inflation rates, often exhibit the phenomenon of volatility clustering, which linear structural (and time series models) cannot explain. i. Explain Volatility Cl..

  Stocks dividend is expected to grow at constant rate

If a stock’s dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT? The stock is in equilibrium.

  What is not a pitfall of the irr rule

What is not a pitfall of the IRR rule? It can be biased against large scaled projects, compared to the NPV rule. Sometime multiple solutions or no solution

  Purchased a call option contract

You have purchased a call option contract on Smith & Smith common stock. The option contract is for 100 shares. The option has an exercise price of $ 43.00 and S&S’s stock currently trades at $40.00. The option premium is quoted at $ 2.00. If the sto..

  Explain cost increases occur annually

Assume cost increases occur annually. Both clients will simultaneously enter care facilities at age 77, spend three years in assisted living and one year in nursing care, and die at age 81.

  Product offerings to reach a wider range of customers

Home Furnishings is expanding its product offerings to reach a wider range of customers. The expansion project includes increasing floor inventory by $656,000 and increasing its debt to suppliers by 85 percent of that amount.

  Steve would like to buy a new car but should complete

1 steve would like to buy a new car but must complete a two-year commitment to the peace corp before he will drive the

  Compute the percentage total return

Suppose a stock had an initial price of $70 per share, paid a dividend of $1.35 per share during the year, and had an ending share price of $88. Compute the percentage total return.

  Coupon bonds making annual payments

Backwater Corp. has 6 percent coupon bonds making annual payments with a YTM of 5.2 percent. The current yield on these bonds is 5.55 percent. How many years do these bonds have left until they mature?

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