Calculate the price that kk corp

Assignment Help Business Management
Reference no: EM132364342

KK Corp. has recently developed a new product which is the first of its kind. KK expects this will give it an important first mover advantage in the market and that is anticipated to provide growth in earnings per share of 400% within the coming year, and 75% growth in each of the subsequent 3 years. After that time, it is anticipated competitors will have established and brought to market alike products with the result that KK would expect earnings growth to drop back to its normal level of 3% per year forever. KK's cash dividend was 10 cents per share last year and is anticipated to remain at that amount for each of the next 5 years. In the sixth year, it is expected that the payout ratio will be 80% of the earnings per share, and the payout ratio is expected to remain at that level forever. The required rate of return on KK's ordinary shares is 20% per year and the latest earnings per share was 25 cents.

A) Calculate the price that KK Corp. ordinary shares should be selling for in the market?

B) If it is recommended that the growth rates should be half (or reduced by 50%) of those projections before growth returns to its normal 3% level. Calculate the price that KK Corp. ordinary shares should be selling for in the market.

Kindly provide manual calculations for both parts with formulas but not excel

Reference no: EM132364342

Questions Cloud

IT security requirements arising from the HIPAA Security : CSIA 413-The company's IT Governance Board has been tasked with developing a set of policies to address IT security requirements arising from the HIPAA Security
Define what were the consequences of a failure to report : What were the consequences of a failure to report? As Mike's manager, what will you do to address the issue with him and ensure other staff members do not.
Cost of capital for risky ptojects : Och SpA is considering a project that will result in initial after tax cash savings of €3.5million at the end of the first year, and these savings wilk grow
Direction influencing the security vulnerabilities : Policy making is critical during the digital age is internally linked to any changes in the organizational direction influencing the security vulnerabilities.
Calculate the price that kk corp : Calculate the price that KK Corp. ordinary shares should be selling for in the market?
Macrs depreciation allowances : A project requires $318,488 of equipment that is classified as 7-year property.What is the depreciation expense in Year 5 given
What yield to maturity is the bond offering : What yield to maturity [interest rate] is the bond offering?" (Cornett, Adair, & Nofsinger, 2016).
What is the after-tax salvage value : What is the After-tax Salvage Value if the tax rate is 39 percent? The MACRS allowance percentages are as follows, commencing with year one
Develop structured unit-based plan that all preceptor follow : To develop a structured unit-based plan that all preceptors and preceptees will follow during the orientation phase. To measure preceptor expectations.

Reviews

Write a Review

Business Management Questions & Answers

  Penetrating price and skimming price strategies

Can you think of a type of business or an industry that can naturally benefit from one or the other price strategies?

  What is the difference between felt empowerment

What is the difference between felt empowerment and structural empowerment?

  Explain net debt-to-enterprise value ratio for some

Explain Which I have attached which shows the net debt-to-enterprise value ratio for some select industries to answer both parts of the question.

  Balance of trade is an important part

The balance of trade is an important part of the U.S.gross domestic product, which is directly involved with the nation's economy. In your paper, comment on the following issues:

  Can decision analysis modeling be applied to your company

Knowledge of and discuss whether or not you believe decision analysis modeling can be applied to it and why.

  Legal and industry in liability management

Identification and discussion of ethics, legal and industry in liability management.

  What is the significance of each of different types of value

What types of value would you consider when assigning "value" to a firm's stock or bond? What is the significance of each of the different types of value in the valuation process? Use examples to support your response.

  Discuss intended strategy and realized strategy

Discuss Intended Strategy and Realized Strategy

  Development of your concept application into enterprise app

Using Microsoft PowerPoint, develop a professional presentation to the CIO to convince him/her to provide the appropriate resources to realize the development, implementation and integration of your concept application into the Enterprise's App St..

  Discuss the ethical implications of hiring frank abagnale

You are the CEO of a company. Discuss the ethical implications of hiring Frank Abagnale as a consultant.

  Differences between a manager and a leader

If a student is looking to find the differences between someone that manages a group of people or someone that leads a group of people

  Priming effect to manipulate consumers

After reading about priming in your text or elsewhere, consider ways in which marketers use the priming effect to manipulate consumers. Identify three examples of print or television ads that utilize the priming effect. For each example, identify ..

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