When valuing a stock using the constant-growth model

Assignment Help Financial Management
Reference no: EM131523235

1. When valuing a stock using the constant-growth model, DI represents the:

A. expected difference in the stock price over the next year.

B. expected stock price in one year.

C. last annual dividend paid.

D. the next expected annual dividend.

E. discount rate.

2. Delfino's just paid an annual dividend of $1.50 per share. What is the anticipated dividend for Year 5 if the firm increases its dividend by 2 percent annually?

A. $1.50 (1.02)1

B. $1.50 x (1.02)2

C. $1.50 (1.02)3

D. $1.50 (1.02)4

E. $1.50 x(1.02)5

Reference no: EM131523235

Reviews

Write a Review

 

Financial Management Questions & Answers

  Determine the firms cash flow in year two

A sports game company with current sales of $400,000 does not expect any growth in sales for the next two years. determine the firm’s cash flow in year two. Assume annual depreciation is $20,000. Which of the following comes closest to profitability ..

  Assume that the risk-free rate of interest

Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 18%.

  What does your value function look like graphically

What does your value function look like graphically? Your friend the Joker gives you two newly issued dollar coins on your birthday. In terms of value, how much did you just gain? Once you have a closer look at them, though, you realize that The Joke..

  What additional information is necessary to make a decision

What additional information is necessary to make a decision concerning the desirability of establishing such a system?

  What is the conversion value

A bond has a par value of $1,000 and a market price of $1,087.20. The conversion price is $40 and the stock price is $41.75. What is the conversion value?

  What is the increase in the value of the equity

A firm has access to two mutually exclusive investment projects. Both the projects require an initial investment of $15,000. If project 1 is undertaken, with probability 1/2, it pays off $20,000 or $34,000. What are the expected payoffs to the bank a..

  Compute the return on berry stock for each year

Calculate the return on berry stock for each year, the average return for the period, and the standard deviation for the period.

  Compact fluorescent lamps-break-even cost

Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.35 and lasts for 1,000 hours. If you require a 9 percent return, at what cost per kilowa..

  Assume investors are risk-neutral-bonds are noncallable

KIC, Inc., plans to issue $5 million of bonds with a coupon rate of 8 percent and 30 years to maturity. The current market interest rates on these bonds are 7 percent. In one year, the interest rate on the bonds will be either 10 percent or 6 percent..

  What weight should use for debt-calculating cost of capital

DeVille Industrial Machines issued 143,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a 7.3 percent yield to maturity. Interest rates have recently increased, and the bonds now have an 8.4 percent yield to ma..

  Financial reporting problem

The financial statements of P&G are presented in Appendix 5B. The company's complete annual report, including the notes to the financial statements, can be accessed at the book's companion website, www. wiley.com/college/kieso.Instructions

  What will be an investors taxable income from the bond

What will be an investor's taxable income from the bond over the coming year?

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