Common stock dividend to grow at constant

Assignment Help Financial Management
Reference no: EM131082765

AWM Corporation expects its common stock dividend to grow at a constant 5 percent for the foreseeable future. The company recently paid a $4.00 dividend. If the required rate of return on the company's stock is 11 percent, what is the value (price) of the stock today?

Reference no: EM131082765

Questions Cloud

What is the estimated production level : Kaufman Industries has just completed its sales forecasts and its marketing department estimates that the company will sell 44,400 units during the upcoming year. In the past, management has maintained inventories of finished goods at approximately 3..
Manufacturers of fine zithers : You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. Assume the company has other profitable projects. MACRS schedule. What is the NPV of the projec..
Concept to encompass surf lifestyle for the home : With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.” With limited capital, they decided to focus on surf print table and floor la..
Which machine would be preferable investment : A restaurant operator wishes to choose between two alternative roll-in storage units. Machine A will cost $9,000 and have a trade-in value at the end of its five-year life of $1,500. Machine B will cost $8,500 and at the end of its five-year life wil..
Common stock dividend to grow at constant : AWM Corporation expects its common stock dividend to grow at a constant 5 percent for the foreseeable future. The company recently paid a $4.00 dividend. If the required rate of return on the company's stock is 11 percent, what is the value (price) o..
Affect the effectiveness of voluntary cooperative methods : What are the characteristics of the Lindahl Equilibrium for cooperative supply of a pure public good? How does the free-rider problem affect the effectiveness of voluntary cooperative methods in achieving efficient levels of output for pure public go..
Monthly charge cookie cutter should pay for lockbox system : It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter’s management is considering a lockbox system to reduce the firm’s collection times. What is the maximum monthly charge Cookie Cutte..
Determine the expected return on the stock : After determining the expected return on its stock, XYZ ventures decides to sell the entire corporation with expected earnings estimated to be $8,000,000. With 200,000 shares outstanding and preferred equity at $4,500,000. Determine the liquidation v..
What are the arithmetic and geometric returns for stock : A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 64.48 — 2 71.35 $ 0.63 3 77.15 0.68 4 63.42 0.74 5 73.41 0.83 6 81.25 0.90 Required: What are the arithmetic and geometric returns for the stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Accounting for bonus-vacation pay and holiday pay

The factory for the week is $200,000, consisting of $140,000 earned by 100 direct laborers and $60,000 earned by 30 indirect laborers. The total of the factory bonuses to be received at year-end is estimated at $400,000. Prepare the entry to distribu..

  Outstanding shares of binder corporation stock

Buddy owns 100 of the outstanding shares of Binder Corporation stock. Buddy's basis in his Binder Corporation stock is $100,000. Binder Corporation is merged with Clipper Corporation in a tax-free reorganization.  Buddy and Bruce each own 25% of Clip..

  What is value of stock today-expanding rapidly and currently

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from toda..

  What are its average accounts payable

Hinkle Corporation buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $550,000 per year. On average, what is the dollar amount of total trade credit (..

  The u.s. financial system has many complexities

The U.S. financial system has many complexities, and it is impacted by several environmental factors, including federal regulations and the economy.

  Maintenance margin and the intial margin

What is the difference between the maintenance margin and the intial margin? Does the trader ever have to worry about intial margin after the intial date of the contract? Explain.

  Present value of your windfall if appropriate discount rate

You have just received notification that you have won the $3.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 64 years from now. What is the present value ..

  Generates after-tax cash flows

An investment of $83 generates after-tax cash flows of $38.00 in Year 1, $70.00 in Year 2, and $133.00 in Year 3. The required rate of return is 20 percent. The net present value is

  Real rate of return including the factor of inflation

Assume you have purchase a 10 year bond, which offers a nominal rate of return of 14%. You would like to know the real rate of return including the factor of inflation. what is the real rate of return? Assuming a 5% inflation rate, what is the real r..

  Conduct customer segment research or go directly to market

B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 60 percent change of success. However, the firm can conduct customer segment research, which will take a year and cost $600,000. By g..

  Bonds at par with annual coupon rate

Last year Malko Enterprises issued 6-year bonds at par with annual coupon rate of 7.5%, payable semi-annually. These bonds currently sell for $1,050. Which of the following statements is incorrect?

  How long will it take bill to recoup his initial investment

Bill Williams has opportunity to invest in project A that costs 5500 today and promises to pay annual cash flows of 2200, 2600,2600, 1900, 1800 over the next 5 years. How long will it take bill to recoup his initial investment in project.

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