What should be the price of the stock

Assignment Help Financial Management
Reference no: EM13878637

A share of common stock just paid a dividend of $3.25. The expected long-run growth rate for the stock is 18%. If investors require a rate of return of 24%, what should be the price of the stock?

Reference no: EM13878637

Questions Cloud

Least likely to be part of an annual report : Which of the following is least likely to be a part of an annual report? a) Financial tables b) discussions of the firm's lines, its services to its customers, and its contributions to the communities in which it operates c) audited financial stateme..
Find the magnitude and coordinate direction angles : The bracket is subjected to the two forces shown. Express each force in Cartesian vector form and then determine the resultant force FR. Find the magnitude and coordinate direction angles of the resultant force.
Analyze some aspect of an organization you are familiar with : In five pages analyze some aspect of an organization you are familiar with and criticize an organizational practice of your choosing
What is maximum monthly mortgage payment you could qualify : Your mortgage lender requires that your monthly mortgage payments not exceed 30% of your gross income and your total loan payments cannot exceed 38% of gross income. Your gross income is $6,802/mo while you have electronics loan payment of $517/mo, f..
What should be the price of the stock : A share of common stock just paid a dividend of $3.25. The expected long-run growth rate for the stock is 18%. If investors require a rate of return of 24%, what should be the price of the stock?
Shares of common stock to public in initial public offering : You decide to take your company public by offering a total of 50,000 shares of common stock to the public in an initial public offering (IPO). You hire an underwriter who arranges a full commitment underwriting and suggests an initial selling price o..
Suppose the firm uses the NPV decision rule : For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0 –$ 153,000 1 78,000 2 67,000 3 49,000 Requirement 1: At a required return of 9 percent, what is the NPV of the project?
Determine the length b of the uniform load : The beam is subjected to the distributed loading. Determine the length b of the uniform load and its position a on the beam such that the resultant force and couple moment acting on the beam are zero.
Provide examples of continuous monitoring and periodic : Provide examples of continuous monitoring and periodic monitoring.

Reviews

Write a Review

Financial Management Questions & Answers

  Cost allocation on a piece of land if the original cost

How do I figure out cost allocation on a piece of land if the original cost was 250,000, market value is 300,000, net book value is 250,000, and offer to purchase is 300,000?

  What will next years assets be at the end of the year

The firm earned $7,000 in sales last year while selling 20,000 units. Net Income that same year was $850. At the end of that same year, the Balance Sheet reflected $11,000 in total assets, having $3,500 in debt and $7,500 in equity accounts. The firm..

  Operating costs other than depreciation

Wells Water Systems recently reported $12,550 of sales, $4,250 of operating costs other than depreciation, and $1,700 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and i..

  What cost structure is best when a provider is capitates

What cost structure is best when a provider is capitates? Explain What cost structure is best when a provider is reimbursed primarily by fee-for-service payers? Explain. What would happen financially to a healthcare organization over time if its pric..

  What is cost of preferred stock

Jensen's Travel Agency has 12 percent preferred stock outstanding that is currently selling for $32 a share. The market rate of return is 13 percent and the firm's tax rate is 34 percent. What is Jensen's cost of preferred stock?

  What is the effective annual rate

What is the effective annual rate of 5.25 percent compounded continuously?

  Cost of preferred stock-cost of preferred stock financing

The preferred stock of Gator Industries sells for $35.85 and pays $2.71 per year in dividends. What is the cost of preferred stock financing? What are the floatation costs for issuing the preferred shares and how should this cost be incorporated into..

  Capital investment committee refused

Unfortunately, the Capital Investment Committee refused to approve your recommendation (Problem 1) since you did not consider the uncertainty inherent in these types of investments. Normal distribution (mean of $10,000, standard deviation of $3,000) ..

  Cost of retained earnings using gordon model approach

Heavy Snow Corporation just paid a dividend of $2.90 per share, and the firm is expected to experience constant growth of 4.20% over the foreseeable future. The common stock is currently selling for $52 per share. What is Heavy Rain's cost of retaine..

  Net fixed asset calculated from information provided

Net working capital is $12,700, current assets are $38,200, equity is $53,400, and long-term debt is $11,600. How is the net fixed asset calculated from the information provided?

  Calculate the firms degree of financial leverage

Carolina Fastener, Inc., makes a patented marine bulkhead latch that wholesales for $6.18. Each latch has variable operating costs of $3.44. Fixed operating costs are $49,600.00 per year. Calculate Carolina Fastener’s operating breakeven point. Calcu..

  Value of equity after recapitalization

Nicki Corporation's value of operations is equal to $500 million after a recapitalization (the firm had no debt before the recap). It raised $150 million in new debt and used this to buy back stock. Nicki had no short-term investments before or after..

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