What required rate of return would result in price per share

Assignment Help Financial Management
Reference no: EM131304123

Roofing, Inc., common stock paid a dividend of $ 1.02 per share last year. The company expects earnings and dividends to grow at a rate of 8%  per year for the foreseeable future. 

1) The required rate of return for this? stock, in order to result in a price per share of 22% is ______ Round to two decimal places

2) If Roofer expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $22.

Reference no: EM131304123

Questions Cloud

Describe decision for choosing particular pricing strategy : Identify your preferred pricing strategy (penetration, skimming, prestige, odd-even, or other pricing strategies. Describe your decision for choosing this particular pricing strategy.
In what ways is the fed subject to external pressure : What is the purpose of the Government in the Sunshine Act? Was Fed Chairman Bernanke justified in evading the requirements of this act during the financial crisis of 2007-2009?
Strategic initiative programmes in operations management : Operations Management (BUSS 1501) - Identify and solve decision problems related to the various operations functions, like capacity, demand forecasting, project management, and inventory control and Differentiate the different techniques and use t..
What is the public interest view of the fed''s motivation : What is the public interest view of the Fed's motivation? What is the principal-agent view? How are these views connected to the theory of the political business cycle?
What required rate of return would result in price per share : Roofing, Inc., common stock paid a dividend of $ 1.02 per share last year. The company expects earnings and dividends to grow at a rate of 8%  per year for the foreseeable future. If Roofer expects both earnings and dividends to grow at an annual rat..
Analyze the basic concepts tools used to diagnose a company : How is the concept(s) used in your current or past place of employment and/or career? Analyze the basic concepts and analytical tools used to diagnose a company's industry and competitive conditions.
How they are divided by race or class or are for everyone : Are you treated as an equal by earlier generations residing here? What are others' attitudes toward you? Why do you think they act this way?Would you feel pressured to pledge your loyalty to a political machine?Would you agree to engage in a strike?T..
Discuss the consumer buying decision process : What might motivate some consumers to read a "top selling" list?- Is the consumer's level of involvement with online book purchase likely to be high or low?
How does deposit insurance encourage banks : What innovations did banks develop to get around ceilings on deposit interest rates?

Reviews

Write a Review

Financial Management Questions & Answers

  The standard deviation of that starting salary

You have chosen biology as your college major because you would like to be a medical doctor. However, you find that the probability of being accepted into medical school is about 10 percent. If you are accepted into medical school, then your starting..

  Use more preferred stock financing

Mullineaux Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 14 percent, the cost of preferred stock is 6 percent, and the cost of debt is 7.5 percent. The com..

  Pays interest forever and has no maturity date

A bond that pays interest forever and has no maturity date (perpetual or consol bond) is similar to a 1) no growth common stock and 2) a preferred stock in what ways?

  Expected return on equity under each current asset level

Payne slase last year were anemic $1.6 million, but with improved product mix it expects to grow 25% this year. Fixed asses $1,000,000. Debt ratio 60%. Debt interest rate 8%. Policies: tight 45% of project sales, moderate 50% of sales tight up in cur..

  Environmental costs increase

Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate o..

  What is the beta of your portfolio

You own 500 shares of Stock A at a price of $85 per share, 300 shares of Stock B at $105 per share, and 800 shares of Stock C at $38 per share. The betas for the stocks are 1.2, 1.5, and .7, respectively. What is the beta of your portfolio?

  What are the portfolio weights for a portfolio

What are the portfolio weights for a portfolio that has 122 shares of Stock A that sell for $32 per share and 102 shares of Stock B that sell for $22 per share? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g.,..

  What is the implied market portfolio according to CAPM

The correlation between stock B and C is 0.5, and the risk-free T-Bill rate is 3%. Solve for the MVE portfolio. Assume stocks B and C are the only assets in the economy. What is the implied market portfolio according to CAPM? What are the βs for the ..

  Medical expenses-preferred provider organization plan

Margo, age 35, was severely injured in an auto accident. She is covered under her employer’s preferred provider organization (PPO) plan. The plan has a $1000 calendar-year deductible, 80/20 percent coinsurance, and an annual out-of-pocket limit of $3..

  A credit default swap is essentially

A credit default swap is essentially a

  What is the value of the fund today

Your brother, who is 6 years old, just received a trust fund that will be worth $32,000 when he is 21 years old. If the fund earns 10 percent interest compounded annually, what is the value of the fund today?

  Calculate amount of capital funding-funds recieved

The Fitness Studio, Inc., with the help of its investment bank, recently issued $43.245 million of new debt. The offer price (and face value) on the debt was $1,000 per bond and the underwriter’s spread was 5 percent of the gross proceeds. Calculate ..

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