What price do you forecast for the stock one year from now

Assignment Help Financial Econometrics
Reference no: EM13333658

Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year.

a. If r = 20% and DIV1 = $6, what is the price of a share?

b. What price do you forecast for the stock one year from now?

c. What is the cost of capital on the stock?

Reference no: EM13333658

Questions Cloud

What is the weight of the motor : Two people carry a heavy electric motor by placing it on a light board 2.05m long. One person lifts at one end with a force of 405N , What is the weight of the motor
Calculate boehms total dividends for 2014 under policies : Boehm corporation has had stabke earnings growth of 8% a year for thee past 10 years and in 2013 Boehm paid dividends of $2.6 millions on net income of $9.8 million.
Explain the solvent in chromotagraphy column : Why do we switch the solvent in chromotagraphy column and which solvent should be switched for
Find the force exerted by the horizontal rope on her arms : A 55.0-kg ice skater is moving at 4.07 m/s when she grabs the loose end of a rope, the opposite end of which is tied to a pole. find the force exerted by the horizontal rope on her arms
What price do you forecast for the stock one year from now : Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year. a. If r = 20% and DIV1 = $6, what is the price of a share
Define end-to-end overlaps and side-to-side : Don't quite grasp the differences between end-to-end overlaps and side-to-side. I feel like it's commone sense that one is overlapped at the end and one at the side, but what all goes into that determiniation
What is the new balance reading : A beaker of water rests on an electronic balance that reads 999.0 g. A 2.4 cm-diameter solid copper ball attached to a string is submerged in the water, What is the new balance reading
Compute the constant angular acceleration of the wheel : A rotating wheel requires 6.00 s to rotate 26.0 revolutions. What is the constant angular acceleration (in rad/s) of the wheel
Explain the indicated amount of dissolved solute : What volume of each of the following solutions contains the indicated amount of dissolved solute? 1.) 4.50g solute in 0.475 M KNO3 2.) 4.50g solute in 0.475 M AlBr3

Reviews

Write a Review

Financial Econometrics Questions & Answers

  Determine how many cups of coffee do have to sell roi

You are open 7 day per week 2. Raising or lowering the price has not effect on sales 3. Price of coffe, sugar, etc. and cups are included in the 20,000K price Questions: How long will it take to break even

  Calculate the current rates for maturity treasury securities

Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1=6%, E(2r1)=7%, E(3r1)=7.5%, E(4r1)=7.85%

  Calculate total number of copies that publisher expects sell

Your finance text book sold 47,500 copies in its first year. The publishing company expects the sales to grow at a rate of 23.0 percent for the next three years, and by 6.0 percent in the fourth year.

  Journalize the march transactions including explanations

the company uses these accounts: cash, prepaid insurance, land, building, equipment,accounts payable, unearned service revenue, common stock, retained earnings, dividends, service revenue, advertising expense and salaries and wage expense

  Describe how management might decide to focus on short term

Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense of long-term profits.

  What is the market price of a 1000dollar face value bond

Wine and Roses, Inc. offers a 8 percent coupon bond with semiannual payments and a yield to maturity of 8.73 percent. The bonds mature in 8 years. What is the market price of a $1,000 face value bond

  Find what is the projects equivalent annual cost or eac

A five-year project has an initial fixed asset investment of $300,000, an initial NWC investment of $28,000, and an annual OCF of -$27,000. The fixed asset is fully depreciated over the life of the project and has no salvage value.

  Determine what is the reason for difference in the yields

Alongside, plot your choice of yields of bonds from a publicly traded organization, for the same time periods. * Compare the two yield curves and answer the following questions: Which yield curve is higher

  Calculate the net present value for the original transaction

Firm H has the opportunity to engage in a transaction that will generate $100,000 of cash flow (and taxable income) in year 0. How does the net present value of the transaction change if the firm could restructure the transaction

  Find how many furnitures were produced on each shift

A furniture company produces 5 times as many beds on shift two than on shift one. If a total of 240 beds were produced, how many were produced on each shift

  Describe what are the pros and cons of the treasury

What are the pros and cons of the Treasury and Federal Reserve intervention in the credit crisis

  Determine what is the firms cash break-even point

A firm has fixed costs paid in cash of $600,000 per year, depreciation is computed on a straight line basis and annually is $125,000, an accounting break-even point of 3,740 units, and a price per unit of $450.

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