What should be the value of junction common stock

Assignment Help Finance Basics
Reference no: EM132495021

Junction Corporation pays 30% of its earnings to stockholders and retains 70% to finance growth. The firm recently paid a $3.20 common stock dividend. Investors require a return of 14% on Junction common stock. If the firm earns a return on equity of 14%, what should be the value of Junction common stock?

Reference no: EM132495021

Questions Cloud

Company cost of preferred stock financing : If new shares are issued, the firm will pay $2 per share in flotation costs. The corporate tax rate is 21%. What is the company's cost of preferred stock financ
Bonds sold for par value : The bonds sold for par value, but flotation costs amounted to 3% of the price. You have a 21% corporate tax rate. What is your firm's cost of debt?
What is firm cost of debt : The bonds sold for par value, but flotation costs amounted to 3% of the price. You have a 21% corporate tax rate. What is your firm's cost of debt?
Firm will pay a common stock dividend : In one year, a firm will pay a common stock dividend of $3.35. The dividends have been growing at 6% per year. Based on analysts' forecasts, you predict
What should be the value of junction common stock : Investors require a return of 14% on Junction common stock. If the firm earns a return on equity of 14%, what should be the value of Junction common stock?
What would be the terminal cash flow : Their tax rate is 21%. If they sell the equipment, what would be the terminal cash flow?
What is the annual cash flow for the project : Operating expenses would increase by $50,000 per year also. The corporate tax rate is 21%. What is the annual cash flow for the project?
What is the irr for project : The cash inflows from year 1 through year 10 will be $40,000 each year. The firm's required rate of return is 9%. What is the IRR for this project?
What is the net present value of the project : What is the net present value of the project if the required rate of return is 16 percent?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the degree of operating leverage at the given level

consider a four-year project with the following information initial fixed asset investment 490000 straight-line

  Why are some bonds sold with a premium

Why are some bonds sold with a premium, some at par value, and some at a discount?

  Research the business model canvas

Research the Business Model Canvas. Utilizing this tool, analyze the business you are proposing and how you intend to create value.

  Explain the similarities of government policies taken

Similarities and differences of government policies taken to stabilize the financial system in two different countries. 4000 word minimum typewritten in 12­point Times Roman font. Double spaced, with standard one inch margins.

  What is the ytm to maturity to the bondholders

In December of 2005, the Eastman Kodak Corporation (EK) had a straight bond issue outstanding that was due in eight years. The bonds are selling for 108.126%.

  What is the 9-month forward price of a stock

What is the 9-month forward price of a stock, currently trading for 88,if risk free T-bills earn 6% and the stock pays $1 dividend at expiration?

  Determine the amount of debt the firm abc

Assume that there are 20 million shares outstanding before the restructuring. Determine how many shares Firm ABC must issue to repay the debt needed to reach the target debt-equity ratio.

  Demonstrate servant leadership in organization

Find an opportunity to demonstrate servant leadership in your organization or community through volunteering or serving others.

  Why do research problems have to be specific

Why do research problems have to be specific? Provide examples of poor research problem definitions and solid research problems.

  Prepare a schedule that shows the allocation of the consider

Prepare a schedule that shows the allocation of the consideration given to individual assets and liabilities under the acquisition method. Ignore deferred tax effects. Prepare a consolidated balance sheet for Lexington and Chalfont on January 1, 2009..

  What is the stock price today

What is the stock price today? (Round answer to 2 decimal places. Do not round intermediate calculations)

  The basics of capital budget

The Basics of Capital Budget, Cash Flow Estimation and Risk Analysis

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