What is woozless current share price

Assignment Help Financial Management
Reference no: EM132059534

Woozles Inc. expects to have earnings per share of $8 in the coming years.

a. Suppose rather than reinvesting these earnings and grow, the firm plans to pay out all earnings as dividends. If shareholders have a required return of 9%, what is Woozles's current share price?

b. Suppose after a few years of following the dividend policy stated in a., Woozles Inc. decides to open new stores in Dartmouth. In order to fund these new stores, they decide to reduce their dividend payout ratio to 65% and use the retained earnings to open the new stores.

This new dividend policy would mean that the first dividend paid would be $5.20 and would allow the company to grow at a constant rate of 5.25% per year. Assuming the risk does not change and the required return stays at 9%, what will Woozles's stock price be with the new policy? Show your work

Reference no: EM132059534

Questions Cloud

Find the maximum investment in working capital : What is the maximum investment in working capital for an acceptable project with a 15% weighted average cost of capital?
What is the book value of the asset : A project requires $256,625 of equipment that is classified as 7-year property. What is the book value of this asset at the end of year 3 given.
How much of the first loan payment is interest : How much of the first loan payment is interest?
What is aftertax cost of debt : What is the aftertax cost of debt if the tax rate is 40 percent?
What is woozless current share price : Suppose rather than reinvesting these earnings and grow, the firm plans to pay out all earnings as dividends.
Both bonds make semiannual payments : Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments.
Interval notation and comparing the results : Be sure to justify this conclusion by writing each of (A ? B) n C and A ? (B n C) in interval notation and comparing the results.
What are her earned hours : What would her pay for this time period be if the company's incentive plan does have a guaranteed wage?
Will the absolute value of a complex number : Will the absolute value of a complex number and its conjugate always be equal? Why or why not?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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