Computed stock price of simeon at the end of the third year

Assignment Help Financial Management

Reference no: EM131606032

Simeon INC. just paid annual dividents of $2.00 on its common stock, and the company intends to pay $2.20, $2.40, and $2.60 dividends over the next three years. In the fourth year, the company expects to begin increasing its annual dividends at a constant rate of 3%. Simeon INC. requires a return on investment of 7%.

a) The computed D4 (dividends amount for the fourth year) is $ _______.

b) Assume the fourth year (D4) amount is $2.70. The computed stock price of Simeon at the end of the third year (P3) is $ _____.

c) In addition to the assumption to the problem above (b.), assume the price at the end of the third year (P3) is $70.00. The computed current stock price (P0) for Simeon is $ _______.

Reference no: EM131606032

Questions Cloud

What must the relevant discount rate be for atlantis stock : Atlantis Seafood Company stock currently sells for $31 per share. What must the relevant discount rate be for Atlantis stock?

What is the cash flow to stockholders : During the year, the company sold $84 worth of common stock. What is the cash flow to stockholders?

Recognized on the march income statement from this order : In the March income statement, how much revenue is recognized on the March income statement from this order?

First-time home owner related to home insurance needs : Describe the recommendations you would have for a first-time home owner related to home insurance needs.

Computed stock price of simeon at the end of the third year : Assume the fourth year (D4) amount is $2.70. The computed stock price of Simeon at the end of the third year (P3) is $ _____.

How much cash in total will the firm net after income taxes : A firm purchased equipment for $800 three years ago, how much cash in total will the firm net after income taxes?

Why the amount of private market insurance coverage : For each of the following risk exposures, explain why the amount of private market insurance coverage may be significantly limited through contractual provision

How much do you need to save at the end of each year : How much do you need to save at the end of each year? How does this change if you can only earn 6% return.

What natural controls exist to prevent homeowners : What natural controls exist to prevent homeowners from the desire to "massage the value" of their homes?

User Account

All Pages