Calculate the present value of cash flows

Assignment Help Financial Management
Reference no: EM131511650

Suppose that a firm’s recent earnings per share and dividend per share are $2.80 and $1.80, respectively. Both are expected to grow at 8 percent. However, the firm’s current P/E ratio of 27 seems high for this growth rate. The P/E ratio is expected to fall to 23 within five years.

Compute the dividends over the next five years.

Calculate the present value of these cash flows using a 10 percent discount rate.

Reference no: EM131511650

Questions Cloud

How much should the stock price change : Consider a firm that had been priced using a 12 percent growth rate and a 14 percent required return. How much should the stock price change?
How much total money will you pay the loan company : You can afford a $1050 per month mortgage payment. You've found a 30 year loan at 8% interest. How much total money will you pay the loan company?
What is your estimate of the stock current price : The company's stock has a beta of 1.65, the risk-free rate is 6%, and the market risk premium is 5%. What is your estimate of the stock's current price?
How much do you need in your account at the beginning : How much do you need in your account at the beginning? How much of that money is interest?
Calculate the present value of cash flows : Calculate the present value of these cash flows using a 10 percent discount rate.
What is the? risk-free monthly lease rate : What is the? risk-free monthly lease rate for a 55?-year lease in a perfect? market?
Time to pay off the debt months : Joey realizes that he has charged too much on his credit card and has racked up $5,800 in debt. Time to pay off the debt months
According to the black-scholes option pricing model : According to the Black-Scholes option pricing model, what is the option's value?
How much total interest will you earn : You deposit $100 each month into an account earning 8% interest compounded monthly. How much total interest will you earn?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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