What is the required return for the stock

Assignment Help Finance Basics
Reference no: EM13301358

A share of common stock has just paid a dividend of $2.00. The market return is 15% and the beta is 2. The three month T-bill rate is 5%. The expected long-run growth rate for this stock is 15 percent.

4a. What is the required return for the stock?
4b. What is the price of the stock?

 

Reference no: EM13301358

Questions Cloud

Which bond will have the greatest change in price : If the required return changes by 15 percent, which bond will have the greatest change in price?
Determine the present hennessey stock price : Many directors assert the small (1%) change in dividend growth rate (with no reduction in dividends) will have a negligible impact on shareholder value and want to proceed immediately. You have been asked to evaluate the decision.
Explain the acid-base reaction between m-nitroaniline : Write a balanced equation for the acid-base reaction between m-nitroaniline and HCl. Using a pKa table, predict which way the equilibrium is favored.
Obtain the shear modulus of the wood : A plank 2.00 cm thick and 15.7 cm wide is firmly attached to the railing of a ship by clamps so that the rest of the board extends 2.00 m horizontally over the sea below. find the shear modulus of the wood
What is the required return for the stock : A share of common stock has just paid a dividend of $2.00. The market return is 15% and the beta is 2. The three month T-bill rate is 5%. The expected long-run growth rate for this stock is 15 percent.
Will the bond prices be the same : AMI Corp. and Chester Corp. have outstanding Bonds with identical remaining terms (10 yrs) and identical Coupon (9%) rates. Moody's has rated AMI Corp. as "Aa" and Chester Corp as "Aaa".
Explain the molar concentration of the excess reaction : One of the reactions (FeCl3 or NaOH) is present in a stoichiometric excess. What is the molar concentration of the excess reaction remaining in solution after Fe(OH)3 has been precipitated
Compute the critical angle for total internal reflection : Light in a transparent material (index of refraction 1.333) strikes the boundary with another transparent material (n = 1.010). compute the critical angle for total internal reflection
Brief company background and history : This week you will continue to work on your Final Project for this module Prepare an annotated outline of your Final Project, indicating the content you plan to include in each section of the report and the concepts and techniques you plan to apply f..

Reviews

Write a Review

Finance Basics Questions & Answers

  Write financial information and report

Please include, as a second attachment, your Excel workbook that includes all of your work for ratios, trends analyses, and other assessment tools that you use.

  What is the accounting break-even level of sales

What is the NPV break-even level of sales assuming a tax rate of 30%, a 10-year project life, and a discount rate of 12%?

  Discuss a financial ratio

Discuss a financial ratio, its primary users (i.e., management, creditors, investors, etc.) and what the financial ratio indicates.

  What is the total dollar amount they will need at closing

They will make a 20% down payment, and they must pay 2 points on the loan. Closing costs should be 3% of the purchase price. What is the total dollar amount they will need at closing?

  What would the gordon model value be

what is its value if the previous dividend was D0=$2 and investors expect dividends to grow at a constant annual rate of (1) -5%, (2) 0%, (3) 5% or (4) 10%?

  What is the value of the option to abandon

If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

  What is the value of teldar to gekko properties

Teldar's post-merger beta is estimated to be 1.7, and its post-merger tax rate would be 35%. The risk-free rate is 6%, and the market risk premium is 5.5%. What is the value of Teldar to Gekko Properties?

  Disclosure requirements under the truth-in-lending act

Explain the disclosure requirements under the Truth-In-Lending Act. In your discussion, include several examples of disclosures that are required for a fixed-rate mortgage note, as well as an adjustable-rate mortgage note.

  Explain what is the company breakeven point

The Company's fixed operating cost are $500,000. its variable costs are $3.00 per unit, and tge product's sales price is $4.00. What is the company's breakeven point?

  What effect will purchase have on illinghams cash flows

Explain what effect will the purchase of the CX700 have on Illingham's net income over the next 10 years and what effect will the purchase have on Illingham's cash flows?

  Write a short paper advising bill and darlene

Write a short paper advising Bill and Darlene what business form you would recommend for them as they start up their business. State any assumptions you make.

  What is the maximum utilization of days

A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 members that the nursing home can experience before it begins to lose mon..

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