User Account

All Pages

Calculate the value of stock

Assignment Help Finance Basics
Reference no: EM133059963

Consider a stock that is not expected to pay any dividend for the next 6 years. 7 years from now, the expected dividend is $0.40 per share, which will continue at a high growth rate of 25% per annum for another 3 years. After that, the dividend will grow at a stable rate of 4% per annum. Calculate the value of this stock if its required return is 11% per annum

Reference no: EM133059963

Questions Cloud

Create a simple credit sheet : You are an accounting supervisor who is primarily in charge of credit and collection. You work for a medium-sized enterprise engaged in the manufacturing of bre
Current price of mission beach bananas shares : a) If investors require a 5% return on similar companies, what is the current price of Mission Beach Bananas shares?
Compute annual depreciation for the first and second years : Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years
Communication and coordination-decision-making : Discuss the following challenges: communication and coordination, decision-making, transportation and logistics, special needs populations, politics,
Calculate the value of stock : Calculate the value of this stock if its required return is 11% per annum
Record the entry to purchase the bonds : ABC Company purchased $1,200,000 of 8%, 5-year bonds from XYZ, Inc. on January 1, 2021, Record the entry to purchase the bonds
What is the nominal annual rate of interest : What is the nominal annual rate of interest compounded quarterly at which $1094.00 will accumulate to $1862.76 in five years and three months?
Obligation to assist other countries experiencing crisis : Do we have an obligation to assist other countries experiencing a crisis, or should that be left to private relief agencies such as the Red Cross?
Fund an annual party for four years : You have decided to make a one-time endowment to fund an annual SBGE graduation party, with a budget of $30,000 per party. Suppose UOM's endowment managers on a

Reviews

Write a Review

Finance Basics Questions & Answers

  You just purchased the common stock of mary flower

you just purchased the common stock of mary flower corporation for 25 per share. suppose the stock has a 65 chance of

  Holding period return-capital gains yield

What is the holding period return (HPR) of their investment? What is the capital gains yield of their investment? What is the dividend yield of their investment?

  What is the yield to maturity

What is the yield to maturity? What is the yield to call? If you bought the bond, which would return would you actually earn? Explain your reasoning.

  What is traded off in trade-off theory of capital structure

Why do we adjust for taxes in determining the cost of debt, but not for the costs of preferred stock and common stock? What is traded off in the trade-off theory of capital structure?

  Determining the zero-coupon bond

If the investor wants to use a 3-year zero-coupon bond and a 4- year zero-coupon bond to hedge his position in interest rate risk, what can he do?

  A firms bonds have amaturity of 10 years with a 1000 face

yield to maturity a firms bonds have amaturity of 10 years with a 1000 face value have an 8 semiannual coupon are

  Find the probability that 6 cars are red and 4 are black

a) Find the probability that 4 cars are red and the rest are silver. (Round to four decimal places as needed.) b) Find the probability that 6 cars are red and 4 are black. (Round to six decimal places as needed.) c) Find the probability that exactly ..

  Compute his required initial investment at the beginning

Holding all other variables constant, an increase in the interest rate will cause to decrease. Management thinks your figures are too low. Which of the following actions would increase the present value of your cash flows? compute his required initia..

  Computation of cost of equity using constant growth rate

Computation of cost of equity using constant growth rate and The constant growth rate dividend capitalization model approach

  Difference between a foreign bond and a eurobond

What is the difference between a Foreign Bond and a Eurobond? Explain you answer with examples.

  Graphing the security market line

A regression was run in Stock B and market proxy portfolio, S&P 500. The regression line is defined as: Y =8.3+1.2X. If risk-free rate is 4%, the market risk premium is 6%, and market return on Stock B is 10.5%,

  Determine the bond continuously compounded yield

A Treasury bond with a par value of $100 pays semiannual coupons at a rate of 5% per annum, has three years until maturity

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd