What will be the dividends and capital gains yield

Assignment Help Financial Management

Reference no: EM131874014

a. XYZ Corporation has been growing at a rate of 20% per year. The growth is expected for another two years and then decline to 6%. If XYZ D0=$1.60 and required rate of return is 10% what is XYZ stock worth today? What is the expected dividend and capital gains yield at year 1? Year 2?

b. Say XYZ supernormal growth is expected to last for 5 years rater than 2 years. How would this affect the price of the stock, dividend yield and capital gains yield? Discuss.

c. What will be the dividends and capital gains yield once the supernormal growth rate ends?

Reference no: EM131874014

Questions Cloud

Finding competition using competitive analysis : Can you find any examples of a company that successfully used competitive analysis to find out what its competition was doing and was able to maintain.

Formula to determine the accumulated balance : Use the compound interest formula to determine the accumulated balance after the stated period. Assume that interest is compounded annually, show your work.

Account paying compound interest : Determine how much more interest would be earned in the account paying compound interest. Round to the nearest cent. Show your work!

Compute basic and diluted earnings per share : Question 1 - EPS; convertible preferred stock; convertible bonds; order of entry. Compute basic and diluted earnings per share for the year ended December 31

What will be the dividends and capital gains yield : What will be the dividends and capital gains yield once the supernormal growth rate ends?

Find the multifactor productivity : Find the multifactor productivity. Use two decimal Places. Units produced: 10,000. Standard Price: $26/unit.

What is the present value of the cash flow stream : What is the present (Year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?

What is the growing speed s of the radius : What is the growing speed s of the radius at the moment t? (Your final answer s = s(t) should be a function depending only on t).

Analyze how your company will implement the new-product : Describe the organization, who are they, what industry they operate in, their mission and values, as well as what makes them different from other organizations

User Account

All Pages