What would you estimate is the stock current price

Assignment Help Accounting Basics

Reference no: EM131518564

Question: A company currently pays a dividend of $2 per share, D0 2. It is estimated that the company's dividend will grow at a rate of 20 percent per year for the next 2 years, then the dividend will grow at a constant rate of 7 percent thereafter. The company's stock has a beta equal to 1.2, the risk-free rate is 7.5 percent, and the market risk premium is 4 percent. What would you estimate is the stock's current price?

Reference no: EM131518564

Questions Cloud

Overall success of company : Producing and marketing a product without regard to ethical, legal, and social considerations is detrimental to the overall success of any company.

What is your forecast of g : A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per share (D1 4), which is expected to grow at some constant rate.

Quality improvement approach : Imagine you need to explain to a community of stakeholders the difference between a quality improvement approach and a process evaluation approach.

Desacribe both advocates position and the critics position : Desacribe both the advocates' position and the critics' position. Determine which position you support and defend your position.

What would you estimate is the stock current price : A company currently pays a dividend of $2 per share, D0 2. It is estimated that the company's dividend will grow at a rate of 20 percent per year.

Apply pay vs google wallet vs paypal : Watch the "Apply Pay vs. Google Wallet vs. PayPal" video clip using the link below and answer the 4 questions following.

What is the preferred stock required rate of return : Fee Founders has preferred stock outstanding which pays a dividend of $5 at the end of each year. The preferred stock sells for $60 a share.

Do you think the high-end designer apparel brands : Do you think the high-end designer apparel brands, such as Gucci, Chanel, or Prada, sell their goods direct to consumers through the Internet?

Regualtion of financial institutions : Provide details on how this plan is evaluated from success to failure. In other words, provide scenarios or key drivers to help determine the plan's success.

User Account

All Pages