Calculate the present value of stock

Assignment Help Finance Basics
Reference no: EM131015747

Outback Outfitters is expected to pay a dividend (D1) of $1.00 next year, with an expected constant growth in dividends of 5%. The required rate of return is 11%.

  • Calculate the present value of this stock.
  • What will be the new price of this stock if the discount rate rises to 12%?
  • What will be the new price of this stock if the discount rate falls to 10%?

Reference no: EM131015747

Questions Cloud

Netstack college has received a grant to wire : Netstack College has received a grant to wire all of its six buildings for 10/100 Ethernet. Four of the buildings contain classrooms and laboratories and will need to support 250 network connections each. One building is for administration and will n..
Discuss the distributions of principal : Create a complete amortization schedule for the car, using the information in questions 1 and 2.
How much work does the elevator do : An elevator is able to raise 9,800 N to a height of 37 m in 14 s. How much work does the elevator do? What is the elevator's power output?
Explain the purpose of maintenance intervals : Explain the purpose of maintenance intervals. Describe the objectives of an airline maintenance program.  Compare and contrast formal and informal training methods
Calculate the present value of stock : Calculate the present value of this stock. What will be the new price of this stock if the discount rate rises to 12%? What will be the new price of this stock if the discount rate falls to 10%?
New degree of operating leverage for output levels : The operating cash flow is $58,000 in this case. Ignore the effect of taxes. What will be the new degree of operating leverage for output levels of 16,400 units and 14,400 units? Please show steps.
What is the new degree of operating leverage : What is the new degree of operating leverage? Round answer to 3 decimal places. Please show steps.
What are international societal considerations : What should be scanned in the task environment?
Amount of the depreciation expense : The MACRS rates are .3333, .4445, .1481, and .0741 for years 1 to 4, respectively. What is the amount of the depreciation expense in Year 3 if the initial cost is $387,950?

Reviews

Write a Review

Finance Basics Questions & Answers

  Problem regarding the debt-equity ratio

The Five and Dime Store has a cost of equity of 15.8 percent, a pretax cost of debt of 7.7 percent, and a tax rate of 35 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.40?

  The ability to access millions of potential respondents

Research Paper: The Internet provides researchers with the ability to access millions of potential respondents

  Computation of gain or loss on sale of investments

Computation of gain or loss on sale of investments and Journal entries to record purchase & sale of company's Common & Treasury stocks

  What must the coupon rate be on the bonds

Osbourne Corporation has bonds on the market with 15.0 years to maturity, a YTM of 10.3 percent, and a current price of $954. The bonds make semiannual payments.

  Benefits of a company investing and trading securities

Suggest the potential benefits of the domestic securities markets to those investing in the foreign securities markets. Provide a specific example to support your response.

  Management component of m and a activity

In the financial management component of M and A activity, valuing a firm extremely important given how many deals fail and how many Acquirers overpay.

  Calculating profitability index what is the profitability

calculating profitability index what is the profitability index for the following set of cash flows if the relevant

  A machine can be purchased for 10500 including

a machine can be purchased for 10500 including transportation charges but installation costs will require 1500 more.

  Why each generic competitive strategy requires different set

Explain why each generic competitive strategy requires a different set of product/market/distinctive-competency choices. Provide an example of this for the computer industry, why do they have different competitive strategies?

  What is the project coefficient of variation

Cheng Inc. is considering a capital budgeting project that has an expected return of 25% and a standard deviation of 30%. What is the project's coefficient of variation?

  Analyze differences of american and european denominations

Compare and contrast the following: the law of one price, absolute purchasing power parity, and relative purchasing power parity? Compare and contrast the real effective exchange rate index and the normal effective exchange rate index?

  After 10 years you sell the house how much do you still

time value of money problems1. 1i borrow 10000 to be paid back over five years.a if the interest rate is 8 what

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