Compute the value of this stock with required return

Assignment Help Financial Management
Reference no: EM131517179

A firm is expected to pay a dividend of $1.15 next year and $1.30 the following year. Financial analysts believe the stock will be at their price target of $30 in two years. Compute the value of this stock with a required return of 11.1 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Reference no: EM131517179

Questions Cloud

Cost of common stock equity : Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity.
What is the future value of this investment at end of year : What is the future value of this investment at the end of year five if 13.01 percent per year is the appropriate interest (discount) rate?
Expected return american eagle outfitters : Expected Return American Eagle Outfitters (AEO) recently paid a $.51 dividend. what is the return shareholders are expecting?
Calculating fees on a loan commitment : You have approached your local bank for a start-up loan commitment for $1,150,000 needed to open a car repair store.
Compute the value of this stock with required return : Compute the value of this stock with a required return of 11.1 percent.
What is the profit-maximizing price that firm should charge : what is the profit-maximizing price that the firm should charge?
Maximum price in light of dividend payment logistics : what will be the expected maximum price in light of the dividend payment logistics?
They switch to the proposed capital structure : What will be the standard deviation in EPS if they switch to the proposed capital structure?
What is the par value of the common stock : What is the par value of the common stock?

Reviews

Write a Review

Financial Management Questions & Answers

  How can the manager immunize the obligation

An insurance company must make a payment of $5,788.125 in 3 years and another $12,762.82 in 5 years. The market interest rate is 5 %. The company’s portfolio manager wishes to fund the obligation using 2-year zero-coupon bonds and perpetuities paying..

  What is the value of p

Describe how fixed costs fi, i ∈ V1, in the CPL model should be computed in order to take labour costs, property taxes and site developments costs into account.

  Which firm is subject to higher degree of economic exposure

The parent of each firm subsidizes its respective research and development centre on an annual basis. Which firm is subject to a higher degree of economic exposure? Explain.

  True regarding this budget request

Which of the following statements is TRUE regarding this budget request?

  The spread have to be to cover the underwriters costs

If the underwriter requires a profit, equal to 1 percent of the sale price, how much, in dollars, will the spread have to be to cover the underwriter's costs and profit?

  How much money will you invest in stock

You have $15,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 9 percent. Assume your goal is to create a portfolio with an expected return of 12.65 percent. How ..

  At what forward rate is the arbitrage eliminated

Assume that annual interest rates are 5 percent in the United States and 4 percent in Turkey. An FI can borrow (by issuing CDs) or lend (by purchasing CDs) at these rates. The spot rate is $0.6647/Turkish lira (TL).  At what forward rate is the arbit..

  Treasury note maturing

A. Suppose that a U.S. Treasury note maturing June 15, 1995 is purchased with a settlement date of February 17, 1994. The coupon rate is 4.125% and the par value is $100,000. The next coupon date is June 15, 1994. What is the full (dirty) price of th..

  Interest compounded monthly

You’re prepared to make monthly payments of $185, beginning at the end of this month, into an account that pays 12 percent interest compounded monthly. Required: How many payments will you have made when your account balance reaches $52,000?

  Assume the total cost of a college education

Assume the total cost of a college education will be $200,000 when your child enters college in 15 years. You presently have $80,000 to invest. What rate of interest must you earn on your investment to cover the cost of your child's college education..

  What is her portfolios beta

An individual has $50,000 invested in a stock with a beta of 0.4 and another $45,000 invested in a stock with a beta of 1.9. If these are the only two investments in her portfolio, what is her portfolio's beta?

  Proposed new plant that would increase productive capacity

A company is considering a proposed new plant that would increase productive capacity. Which of the following statements is correct?

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