Changes in the political and economic environment

Assignment Help Financial Management

Reference no: EM131326884

Whole Foods Inc. paid a quarterly dividend of $0.52 recently. Treasury bills are yielding 4%, and the average stock is returning about 11%. Whole Foods is a stable company. The return on its stock responds to changes in the political and economic environment only about 70% as vigorously as that of the average stock. Analysts expect the firm to grow at an annual rate of 3.5% into the indefinite future. Calculate a reasonable price that investors should be willing to pay for Whole Foods stock. Do not round intermediate calculations. Round the answer to the nearest cent.

Reference no: EM131326884

Questions Cloud

Use as annual sales when analyzing the proposed expansion : Donegal Brothers is an exclusive retailer of men's clothes. The store is located in a prime professional office building and has average annual sales of $2.2 million. Currently, the owner is considering expanding into professional attire for women. W..

Create an analysis that adds to strategy formulation : The Under Armour case reviews a number of areas where portfolio analysis could be useful. Create an analysis that adds to strategy formulation for them. What are the weaknesses with the areas you chose? Use research about the company today as well as..

Manufacturing facility that is currently sitting idle : Big Joe's owns a manufacturing facility that is currently sitting idle. The facility is located on a piece of land that originally cost $129,001. The facility itself cost $650,000 to build. As of now, the book value of the land and the facility are $..

At what price should shares of framingham stock be selling : The Framingham Company expects to grow at 4% indefinitely. Economists are currently asserting that investment opportunities in short-term government securities (Treasury bills) are readily available at a risk-free rate of 5%. The stock market is retu..

Changes in the political and economic environment : Whole Foods Inc. paid a quarterly dividend of $0.52 recently. Treasury bills are yielding 4%, and the average stock is returning about 11%. Whole Foods is a stable company. The return on its stock responds to changes in the political and economic env..

What is the growth rate inspected to be in the future : One year ago, the stock price was $245. Today, the stock price is $257. Over the year, the firm distributed Dividends of $1.25 per share. What is the total return of the stock over the past year? Next year’s Dividend, per share, is expected to be $2...

Making decisions in business can be difficult : Making decisions in business can be difficult. Fortunately we have a lot of great tools to help us! Choose two decision-making tools and explain how you would use them to make a decision with an actual problem you have faced in your professional life..

Assume relative purchasing power parity exists : Currently, you can exchange €100 for $125. The inflation rate in Europe is expected to be 2.5 percent. In one year, it is expected that €100 can be exchanged for $125.88. Assume relative purchasing power parity exists. What is the expected inflation ..

Analysis showing the pros and cons of each decision : Eric and Tammy feel like they will live in their home forever. They are considering refinancing their home. Eric and Tammy were told by a mortgage broker that they would qualify for a 3.8% rate on a 15 year or 4% on a 30-year mortgage. Provide an ana..

User Account

All Pages