What is the value of share of sinclair pharmaceuticals today

Assignment Help Financial Management

Reference no: EM131307919

Sinclair Pharmaceuticals, a small drug company, develops a vaccine that will protect against Helicobacter pylori. a bacteria that is the cause of a number of diseases of the stomach. It is expected that Sinclair Pharmaceuticals will experience extremely high growth over the next three years and will reinvest all of its earnings in expanding the company over this time, learning's were $1.30 per share before the development of the vaccine and are expected to grow by 40% per year for the next three years. After this time, it is expected growth will drop to 5% and stay there for the expected future. Four years from now Sinclair will pay dividends that are 75% of its earnings. If its equity cost of capital is 11%, what is the value of a share of Sinclair Pharmaceuticals today?

$44.50 $46.82 $34.23 $27.38

Reference no: EM131307919

Questions Cloud

Decisions such as cash flows-sunk costs-opportunity costs : Identify and define up to three concepts associated with making capital investment decisions such as cash flows, sunk costs, opportunity costs, or others. Discuss why your selected concepts are important for the investor to factor into the decision-m..

The firm will experience financial distress : The less liquid assets a firm holds, the less likely it is that the firm will experience financial distress. The higher the liquidity ratios, the more liquidity risk a firm has.

Statements about regulatory and legal issues is most correct : Which of the following statements about the finance department at large healthcare organizations is most correct? Which of the following statements about the income statement is most correct? Which of the following statements about regulatory and le..

Annual cash flows-discounted payback period : An investment project costs $10,000 and has annual cash flows of $2,800 for six years. What is the discounted payback period if the discount rate is 0 percent? What is the discounted payback period if the discount rate is 4 percent?

What is the value of share of sinclair pharmaceuticals today : Sinclair Pharmaceuticals, a small drug company, develops a vaccine that will protect against Helicobacter pylori. a bacteria that is the cause of a number of diseases of the stomach. If its equity cost of capital is 11%, what is the value of a share ..

How much money does firm expect to collect in the month : D&F Inc., expects credit sales of $980, $1,460, $1,730 and $950 for the months of April through July, respectively. The firm collects 25 percent of sales in the month of sale, 65 percent of sales in the month following the month of sale, and 8 percen..

Calculate pattycakes cash ratio and current ratio : You are evaluating the balance sheet for PattyCake’s Corporation. From the balance sheet you find the following balances: cash and market able securities = $500,000; accounts receivable = $1,000,000; Calculate PattyCakes’ current ratio. Calculate Pat..

Effective quarterly return and effective monthly return : You are looking at an investment that has an effective annual rate of 14.2 percent. Effective semiannual return %. Effective quarterly return %. What is the effective monthly return?

Needs to reinvest its earnings to fund its various projects : Pine Grove, Inc., is a thriving young company and it expects no dividends over the next 3 years because the company needs to reinvest its earnings to fund its various projects. The company will pay a $6.4 per share dividend in 4 years and will increa..

User Account

All Pages