Assuming the market is in equilibrium

Assignment Help Financial Management

Reference no: EM131519490

Crisp Cookware's common stock is expected to pay a dividend of $1.5 a share at the end of this year (D1 = $1.50); its beta is 1.00. The risk-free rate is 5.4% and the market risk premium is 4%. The dividend is expected to grow at some constant rate gL, and the stock currently sells for $44 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is )?

Reference no: EM131519490

Questions Cloud

Explain the steps involved in increasing the interest rate : The Fed recently announced that they were raising the federal funds rate in March. Explain the steps involved in increasing the interest rate.

Most commonly used monetary policy tool : The discount rate for primary credit is the second most commonly used monetary policy tool.

Describe the process that the offender would go through : Describe the process that the offender would go through in the criminal justice system, beginning with arrest.

Explain what the number means : What is the three day 99% value at risk for the portfolio? Explain what the number means?

Assuming the market is in equilibrium : Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is )?

By how much does diversification reduce the var : By how much does diversification reduce the VaR?

How elasticity of demand affects management decision : Calculate how elasticity of demand affects the management decision making procedure in respect of setting prices for their products

How banks expand the money supply : How banks expand the money supply? What happens to a bank and the banking system, if someone does not repay a loan?

Discuss cash increases and accounts payable decreases : Using the notion that the accounting equation (Assets = Liabilities + Stockholders' Equity) must remain in balance, indicate whether each of the following.

User Account

All Pages