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Consider the situation for Hampton Inc., a company that was set up in 2016 to produce and market a new high-tech fishing lure. Hampton’s sales are currently growing at a rate of 50% per year. The company expects to experience a high but declining rate of growth in sales and earnings during the next 8 years, after which analysts estimate that it will grow at a steady 10% per year. The firm’s management has announced that it will pay no dividends for next 4 years (2018 to 2021) but that if earnings materialize as forecasted, it will pay a dividend of $1.40 per share at the end of Year 5 (in 2022), $1.60 in Year 6, $1.80 in Year 7 and $2.20 in Year 8. After Year 8, current plans are to increase dividends by 4.34% per year. Hampton’s investment bankers estimate the cost of equity to be 6.42% on similar stocks.
What is the Hampton’s stock current price in 2018 based on the dividend discount model?
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What is the net working capital for United Ltd.? What is the ending retained earnings?
The Aspen Corporation is expected to pay the following dividends over the next three years: $5, $3, $2. What is the stock price today?
Using the? Black-Scholes formula, compute the price of the call.
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A couple bought a $300,000 home four years ago using a 15 year loan with an annual rate of 4.5% and a 20% down payment. What would be their monthly payments? Today they want to use a home equity line of credit to pay off some credit card debt. How mu..
Compute the current value of bonds in Lady? Boland’s possession under the light of the interest rate increase to 12%.
Consider three bonds with 8% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. What will be the price of each bond if..
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