At what constant rate is stock expected to grow

Assignment Help Financial Management
Reference no: EM131600000

Carnes Cosmetics Co.'s stock price is $76.23, and it recently paid a $1.75 dividend. This dividend is expected to grow by 29% for the next 3 years, then grow forever at a constant rate, g; and rs = 13%. At what constant rate is the stock expected to grow after Year 3? Round your answer to two decimal places. Do not round your intermediate calculations.

Reference no: EM131600000

Questions Cloud

Why we distinguish between convergence and harmonization : Briefly summarize the article. Do you agree or disagree with the article? Why must we distinguish between convergence and harmonization
What is net present value of this project : What is the net present value of this project if it the start-up cost is $1,713?
List the requirements of valid contract : Ed, a businessperson, is a friend of Fran, the owner of a Good Bean Coffee & Bagels store. List the Requirements of a valid contract:
What is the standard deviation of returns for stock a : What is the standard deviation of returns for stock A? What is the variance of returns for stock B? What is the average return of stock C
At what constant rate is stock expected to grow : At what constant rate is the stock expected to grow after Year 3?
What type of good is a broadcast television or radio signal : Broadcast television and broadcast radio send out signals that can be received by an infinite number of receivers without reducing the quality.
Solve the ai problem through possible logical systems : Determine which possible logical systems could be applied to solve the AI problem. How are these relevant to the game?
What is the annual carrying costs of post card inventory : Post Card Depot, an large retailer of post cards, What is the annual carrying costs of post card inventory.
What is their degree of combined leverage : What is their Degree of combined leverage if they sell 150,000 units?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the expected return on each stock

SML Suppose you observe the following situation: Return if State Occurs State of Probability of Economy State Stock A Stock B Bust .15 − .10 − .08 Normal .60 .09 .08 Boom .25 .32 .26 a. Calculate the expected return on each stock. (Do not round inter..

  What is required rate of return on the investors portfolio

An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 1.50, and $25,000 in Stock B which has a beta of .90. The return on the market is equal to 6% and treasury bonds have a yield of 4%. What is the required rate of r..

  Differentiate type of creditors-short and long term creditor

Differentiate two types of creditors: short-term vs. long-term creditors. What are the specific financing needs that are being serviced by each type? Cite references

  Determine which one of three portfolios dominates another

Determine which one of these three portfolios dominates another.

  The project will produce same after tax cash inflows

Gold mining, inc uses the profitability index when evaluating projects. gold mining's cost of capital is 12.57 percent. what is the PI of a project if the initial costs are $1952278 and the project life is estimated as 9 years? the project will produ..

  Sales outstanding-cost of trade credit to customers

McEwan Industries sells on terms of 3/10, net 35. Total sales for the year are $1,311,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 50 days after their purchases. What is the days sales outstan..

  What would the new equity be worth

The risk-free rate is 4%; the equity premium is 3%. What is the firm's beta? The firm is pondering a recapitalization to $1,000 debt, which would increase the debt's interest rate to 8%.

  Determine the annual percentage rate of increase for budget

The annual budget for a University Department has been increasing by the same percentage each year and is expected to continue to increase at this percentage rate annually for the foreseeable future. This year the budget is $1.65 million and two year..

  What would be the present value of this loan

Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan’s eight-year life. a. At what amount could this loan be sold for to another bank if loans of similar quality carried an 8.5 perce..

  What was the firms operating cash flow during 2014

The December 31, 2013, balance sheet of Schism, Inc. - The firm's net capital spending for 2014 was $640,000,- What was the firm's operating cash flow during 2014?

  What is optimal sharpe ratio in portfolio of two assets

You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the assets are 14 percent and 17 percent, respectively. The standard deviations of the assets are 40 percent and 48 percent, respectively. The correlation be..

  Average interest rate provide you the average return

Consider that you are the manager of a bank and you face a potential loan applicants pool made up of equal amounts of low risks and high risks, will charging an average interest rate provide you the average (expected) return? Explain.

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