User Account

All Pages

Constant rate of return that cadar security must earn

Assignment Help Finance Basics
Reference no: EM133121560

Cadar Security recently paid an annual dividend of $6.60 on its common stock. The price of the Cadar's stock is $42.21 per share and the required return on this stock is 19.11%. The company always pays 90% of its earnings as dividends and reinvests other 10% back into business. What is the constant rate of return that Cadar Security must earn on its investments to justify its $42.21 share price?

Reference no: EM133121560

Questions Cloud

What is the correct amount of bond interest expense : Interest is paid annually on December 31. What is the correct amount of bond interest expense to be recorded on December 31, 2022 using GAAP
Prepare a summary cash flow budget : Prepare a Summary (by year) Cash Flow budget for the ten years estimated to pay for this project. How much in total will the City Band trustees need to pay
What is the minimum acceptable selling price per unit : Assume that direct labor is an avoidable cost in this decision. In negotiating a price for the special order, what is minimum acceptable selling price per unit
Constant payout and retention ratios : For a firm with a constant payout and retention (plow back) ratios, the dividend growth rate can be estimated as:
Constant rate of return that cadar security must earn : Cadar Security recently paid an annual dividend of $6.60 on its common stock. The price of the Cadar's stock is $42.21 per share and the required return on this
What is the project payback : Project L requires an initial outlay at t = 0 of $59,000, its expected cash inflows are $10,000 per year for 7 years, and its WACC is 11%.
Compare and contrast the typical capital structure : Compare and contrast the typical capital structure for companies across the following industries: financial (banking), technology (software), airlines (air tran
Calculate the price of a call and put option : Using the 2007-2008 data provided1 in your course room, you must include an Excel spreadsheet with the option pricing when the financial crisis started.
What is the bond yield to maturity : Tirtirogu Corp.'s bonds currently sell for $1,145.68 and have a $1,000 par value. They have a 7.50% annual coupon rate and a 15-year maturity.

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe the circumstances that might create concern or

describe the circumstances that might create concern or wariness about a high margin business. provide a current or

  What is the payback period of the investment

A Company is considering an investment of $600,000 in a new motorcycle model. They expect to increase sales in each of the next three years by $400,000.

  What should be the value of put option today

Assume the risk-free rate is zero. An investor sells call options with a strike price of $22. What should be the value of put option today?

  What range of share prices for kcp is consistent with these

Suppose you believe KCP’s weighted average cost of capital is between 10% and 12%. What range of share prices for KCP is consistent with these forecasts (keeping KCP’s initial revenue growth and EBIT margin at 9%)?

  Fictional exchange rate press

The following exchange rates were published in today's paper Fictional Exchange Rate Press.

  Identify a futures commodity-exchange-stock

Identify a futures commodity, exchange, stock, or interest rate. Use the internet to find a short history of the performance of this futures contract. Then research the possible reasons for this performance. What would you consider in investing in..

  What rate of return would they be? earning

They? don't have the slightest idea what return they would be making on their investment of ?$17,912.58. What rate of return would they be? earning?

  How much will you have at the end of the five years

Your grandfather has agreed to deposit a certain amount of money each year into an account paying 7.75 percent annually to help you go to graduate school

  Disadvantages of public private partnerships

For this question you will have to discuss the advantages and disadvantages of public private partnerships and give relevant examples from the Pacific.

  Profitability index of the project-we-know-widgets

We-Know-Widgets, Inc. is analyzing a project that requires an initial investment of $10,000, followed by cash inflows of $1,000 in Year 1, $4,000 in Year 2

  What are the top three financial ratios

What are the top three financial ratios to look at in terms of a company's potential to go bankrupt?

  Estimate the proportion of adults

A researcher wishes to estimate the proportion of adults who have? high-speed Internet access.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd