Calculate the return if price of the stock at end of year

Assignment Help Financial Management
Reference no: EM132006768

1. As the beginning of the year, you purchased a share of stock for $35. Over the year the dividends paid on the stock were $2.75 per share.

A. Calculate the return if the price of the stock at the end of the year is $30

B. Calculate the return if the price of the stock at the end of the year is $40

2. WGM Inc. is a profitable company that is not paying a dividend on its common stock. James Weber, an analyst for A.G. Edwards believes that WGM will begin paying a $4.00 per share dividend in three years and that the dividend will increase 7% annually thereafter. James believes that the required return for WGM is 12%. According to James’ estimate, what is the current value of WGM’s common stock?

a.   $63.78

b.   $80.00

c.   $71.43

d.   $75.00

e.   $40.00

Reference no: EM132006768

Questions Cloud

What is the value of invested capital for this opportunity : Given the FCF growth rate is 3% forever, what is the value of invested capital for this opportunity?
Compare utilitarianism and deontological ethics : Clearly identifies the problem of the case using elaboration/ examples and/or the relevant concepts. Identified and clearly defined all moral principles.
Probability that a randomly selected water bottle : The number of ounces of water is a water bottle is normally distributed with a mean of 16.9oz and a standard deviation of 0.25oz.
Provide an argument for there being an ethical : provide an argument 'FOR' there being an ethical/philosophical reasoning for changing laws. Submit your position by posting in the Unit 2 Debate forum.
Calculate the return if price of the stock at end of year : Over the year the dividends paid on the stock were $2.75 per share. Calculate the return if the price of the stock at the end of the year is $30.
Probability that a student got an a given that they studied : The probability that a student got an A given that they studied 10 hours or more is 0.625. Which of the below is true?
Discuss the challenges and risks you may face : Discuss in 525 words the challenges and risks you may face in starting a business in a foreign country.
Formulate the above problem as a lp problem : 1. Formulate the above problem as a LP problem. 2. Can the above problem be solved graphically? Why or why not?
Developed to estimate risk in equity cash flows : The capital asset pricing model is a model that was developed to estimate risk in equity cash flows, particularly for publicly traded stock equities.

Reviews

Write a Review

Financial Management Questions & Answers

  Profit to determine the final amount of the bid

Using this estimate, add 10% for Overhead Expenses and 7% for Profit to determine the final amount of the bid.

  Corporations are required to submit quarterly-annual reports

Most publicly traded corporations are required to submit quarterly (10Q) and annual reports (10K) to the SEC detailing the financial operations of the company

  What are the required annual payments on the loan

A couple borrows $935,000 for 7 years for the purchase of a vacation home at an interest rate of 7%. The loan requires that the interest and principal be paid in equal, annual payments. The interest is determined on the declining balance that is owed..

  Defaults are correlated defaults are independent

The probability of a high aggregate default rate if defaults are correlated defaults are independent?

  Required return on the same project and the mirr

The IRR project is more than the Required Return on the same project and the MIRR is less than IRR.

  What is the amount of cash flow from assets

The Plaza Cafe has an operating cash flow of $83,770, depreciation expense of $43,514 and taxes paid of $21,590.

  What is the margin of safety percentage

What is the margin of safety in dollars? What is the margin of safety percentage?

  Values of their superannuation accounts at retirement

What are the accumulated values of their superannuation accounts at retirement?

  Emphasize dividend paying stocks

Are there mutual funds that ‘cater to’/emphasize dividend paying stocks?

  Alternatives based on incremental present worth

Compare the alternatives based on the incremental present worth (PW). Since there is positive cash flow,

  Calculate the annual straight line depreciation for project

Johnson Products is considering purchasing a new milling machine that costs $100,000.- Calculate the project's net investment (NINV).- Calculate the annual straight-line depreciation for the project.

  Would these bonds be of interest only to investors

Would these bonds be of interest only to investors who were young enough to expect to still be alive in 40 years, when the bonds will mature?

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