But afterwards they will no longer pay dividends

Assignment Help Financial Accounting

Reference no: EM131292202

The Green Leaf Co. pays a constant dividend of $2.60 a share. The company announced today that it will continue to pay the annual dividend for the next 2 years, but afterwards they will no longer pay dividends. If the required rate of return is 8.2 percent, what is this stock worth today? Assume the next dividend is in one year.

Reference no: EM131292202

Questions Cloud

What is the break-even point in unit sales and dollars sales : Awree NatCacnotus Inc, an innovative company located somewhere on the beautiful winding slopes of Pacific Northwest (a great place for hiking), produces and sales a single product, Metadite, an organic cream used for a variety of home first and uses...

Cost of goods sold under each of assumed cost flow methods : A Sekhon Company had a beginning inventory on January 1 of 165 units of Product 4-18-15 at a cost of $18 per unit. During the year, the following purchases were made. Determine (1) the ending inventory, and (2) the cost of goods sold under each of th..

What are the net present value and internal rate of return : Centaur Corporation is considering the purchase of an annex to one of its buildings. The annex will cost $10,000,000. Centaur estimates that the building annex will save it $900,000 in rent in its first year, and that the rent savings will increase b..

Scholarships each year for worthy students : George Jefferson established a trust fund that provides $181,500 in scholarships each year for worthy students. The trust fund earns a 3 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest i..

But afterwards they will no longer pay dividends : The Green Leaf Co. pays a constant dividend of $2.60 a share. The company announced today that it will continue to pay the annual dividend for the next 2 years, but afterwards they will no longer pay dividends. If the required rate of return is 8.2 p..

The company has promised to maintain constant dividend : The common stock of Jordan's Jalopies Inc. will pay an annual dividend of $3.40 a share in one year. The company has promised to maintain a constant dividend. How much are you willing to pay for one share if you require a 10.50 percent return on your..

Annual coupon bond that makes semiannual payments : Chesterton, Inc. wants to sell you a 6.0 percent annual coupon bond that makes semiannual payments. Your required return on the bond is 6.48 percent annually with semi-annual compounding, and the bond matures in 7 years. How much would you pay for th..

What was the nominal rate of return on your investment : Your investment in Roy Roy, Inc. provided you a real rate of return of 4.0 percent last year. The inflation rate last year was 2.3 percent. What was the nominal rate of return on your investment?

User Account

All Pages