Calculate your forecast of gl

Assignment Help Financial Management
Reference no: EM131997534

A stock is trading at $85 per share. The stock is expected to have a year-end dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate gL throughout time.

The stock's required rate of return is 10% (assume the market is in equilibrium with the required return equal to the expected return).

What is your forecast of gL? Round the answer to three decimal places.

Reference no: EM131997534

Questions Cloud

Prepare a pension worksheet for eagle homes : For 2014, prepare a pension worksheet for Eagle Homes that shows the journal entry for pension expense
Calculate the price that reflects the fundamental value : Calculate the price that reflects the fundamental value of the stock.(3) If the price is now $80 per share, should stock Y be purchased?(1)
Can diversification produce benefits if the correlation : Can diversification produce benefits if the correlation between two stocks is greater than zero?
Strengths and weaknesses of policy borne of compromise : What do you see to be the potential strengths and weaknesses of policy borne of compromise?
Calculate your forecast of gl : The stock is expected to have a year-end dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate gL throughout time.
Influence the congress and the president : What tactics and methods does it use to influence the Congress and the president?
Should do in the face of fascism : What would Arendt's theory suggest we should do in the face of fascism, if it does indeed rise in the United States? Provide specific examples.
Determine stone sour co''s internal growth rate : Stone Sour Co. has an ROA of 7 percent and a payout ratio of 34 percent. What is its internal growth rate?
What are the requirements for polyarchy : What are the requirements for polyarchy, or large-scale democracy, according to Robert Dahl? Please list them and explain in brief why they are needed.

Reviews

Write a Review

Financial Management Questions & Answers

  What was the percentage change in its value

Trepak (The Russian Dance). The Russian Ruble (RUB) traded at RUB 29.00/USD on January 2, 2009. On December 11, 2010, its value had fallen to RUB 31.45/USD. What was the percentage change in its value?

  To conduct one-sided hypothesis test of the claim

To conduct a one-sided hypothesis test of the claim that houses located on corner lots (corner-lot houses) have higher average selling prices

  Discuss why it is considered tax-sheltered investment

What is an annuity? Discuss why it is considered a tax-sheltered investment.

  What is the cost to the financial institution

A financial institution has entered into a 10-year currency swap with company Y. - What is the cost to the financial institution?

  Price change and how much was due to the dividend income

At the beginning of last year, you invested $4,000 in 80 shares of the Chang Corporation. During the year, Chang paid dividends of $5 per share. At the end of the year, you sold the 80 shares for $59 a share. Compute total HPY on these shares and ind..

  What is the aftertax cost of debt-pretax cost of debt

Mudvayne, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 104 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually...

  Assess the challenges related to using the earnings

Assess the challenges related to using the earnings-based valuation method in practice, suggesting how each of these challenges may be overcome.

  Bonds on market making annual payments

Barnes Enterprises has bonds on the market making annual payments, with 14 years to maturity, a par value of $1,000, and a price of $972. At this price, the bonds yield 8.4 percent. What must the coupon rate be on the bonds?

  What is the payout and the profit

You purchase an IBM call contract at $120 for a premium of $5. You hold the option until expiration, when share price is $123.

  Acquires an oil and gas property interest

Jimmy acquires an oil and gas property interest for $600,000. Jimmy expects to recover 200,000 barrels of oil. Intangible drilling and development costs are $160,000 and are charged to expense. Other expenses are $40,000. During the year, 25,000 barr..

  What is the amount of the firm net fixed assets

Current liabilities are $970, sales are $5,135, profit margin is 10.10 percent, and ROE is 17.40 percent. What is the amount of the firm's net fixed assets?

  The internal rate of return

The internal rate of return (IRR) is __________.

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