Bond yield plus risk premium approach

Assignment Help Finance Basics

Reference no: EM1357600

The earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow at 7 percent per year in the future. Carpetto's common stock sells for $23 per share, its last dividend was $2.00, and it will pay a dividend of $2.14 at the end of the current year.

If the firm's bonds earn a return of 12 percent, what will Rs be based on the bond-yield-plus-risk-premium approach, using the midpoint of the risk premium range?

Reference no: EM1357600

Questions Cloud

What was the joggers average speed : A jogger jogs around a circular track with the diameter of 325 m in 16 minutes. What was the jogger's average speed in m/s.

Two poorly functioning teams : Two Poorly Functioning Teams - Enlist the multiple factors that caused the poor functioning of each group

Introduction to somatoform disorder : If you were a counselor how would you counsel a client with Undifferentiated Somatoform Disorder or what kind of help will you provide and what will be the first thing?

Explain from the scenario and examine two strategies : Explain From the scenario and examine two strategies that organizations use to combine incentive plans in a balanced scorecard

Bond yield plus risk premium approach : The earnings, dividends, and common stock price of Carpetto Technologies are expected to grow at 7% each year in the future. Carpetto's common stock sells for $23 each share,

Find the change in energy and frequency : Water can hold 36 grams (g) of salt in every 100 milliliters (mL). The ocean contains 3.6 g of salt in every 100 mL. As a solution, which is seawater.

Find probability of having no umbrella if it rains : When rain is forecast, Mr. Pickwick takes his umbrella. When rain is not forecast, he takes it with probability 1/3. Find the probability that Pickwick has no umbrella, given that it rains.

Social factors involved in obsessive-compulsive disorder : Discuss the biological, psychological, and social factors involved in obsessive-compulsive disorder with one reference and citation 350 words.

Explain thoroughly review the harrison act : Explain Thoroughly review the Harrison Act and its ramifications. As part of your response defend whether or not you believe this Act was beneficial

User Account

All Pages