Calculate the intrinsic value

Assignment Help Finance Basics
Reference no: EM133072649

Pepsico's most recent dividend was $1. The dividend is expected to increase 10% for the next three years. After these three years of strong growth, the stock is then expected to grow at a constant 4% thereafter. Calculate the intrinsic value using the multi-stage dividend discount model. Pepsico's required rate of return is 8%. Give your answer to the nearest cent (i.e. two decimal places).

Reference no: EM133072649

Questions Cloud

Calculating the portfolio performance : Imagine that you are a financial advisor and a client has come to meet with you to review his portfolio's performance over the last year.
What is the net present value of debt financing : BBC borrows a 23-year loan of $16,417 at 6% to finance a project. The corporate tax rate is 35%. If BBC is required to repay 1/6 of the loan at the end of year
What is ford beta : The table below presents prices (levels) and returns for Ford Inc. and the S&P 500 Index (market portfolio). What is Ford's beta?
What is the payback period of project : The firm's required rate of return is 9%. What is the payback period of this project?
Calculate the intrinsic value : Calculate the intrinsic value using the multi-stage dividend discount model. Pepsico's required rate of return is 8%.
What does the term risk and rewards model mean : Question - What does the term risk and rewards model mean and control model in financial accounting
American based asset management company : You work as a Certified Financial Planner at an American Based Asset Management Company. Aside from managing stock portfolios, the company also does proprietary
Determine the yield on the bond : Question 1: Assuming the price of a 12 year zero coupon bond is $724.89 and has a face value of $1,000, determine the yield on the bond, duration, and modified
Business structures and the legal environment : Case Studies on Contract Law and Corporations Law - explain to Jonathan of the many ways in which to reduce his tax liability. Jonathan is most impressed

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the yield to maturity for the bond?

What is the yield to maturity for the bond?

  Compute the power of the test if the true mean diameter is

a bearing used in an automotive application is suppose to have a nominal inside diameter of 1.5 inches. a random sample

  What is the next dividend per share

If it's the company's policy to always maintain a constant growth rate in its dividends, what is the next dividend per share?

  Changing vuca world

What it means to be an HR professional in this ever changing VUCA world compared to how it used to be you may want to consider the need for the HR professional

  What percentage of salary should you save

What percentage of your salary should you save if you want to have exactly your university expenses amount?

  How big of a loan can you afford

You can afford a $800 per month mortgage payment. You've found a 30 year loan at 7% interest.

  Determine the price at which analog stock should sell

As a finance manager, you have been schedule to attend an investment committee meeting chaired by the Chief Investment Officer (CIO). Four outstanding issues

  List factors that facilitate collusion

How do why do multinational firms use different strategies if they enter a developing country rather than an industrialised one?

  Relationship between futures price and expected future spot

"The relationship between futures price and the expected future spot price of an underlying asset depends on the systematic risk of the underlying asset."

  How much additional cash will lola need to add

How much additional cash will Lola need to add to her margin account if the share prices increases to $350.83 next morning?

  A new after-school delinquency prevention program

A new after-school delinquency prevention program is being established. The Program Director calls you up on the telephone and asks your advice on how to design a good program. What advice can you give her?

  What is the aftertax cost of the company debt

If the corporate tax rate is 35 percent, what is the aftertax cost of the company's debt?

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