Current intrinsic value of plastic pretzels stock

Assignment Help Financial Management
Reference no: EM131984355

Plastic Pretzels stock recently paid a dividend of $1.15 per share. The dividend growth rate is expected to be 4.20% indefinitely. Stockholders require a return of 11.00% on this stock.

a. What is the current intrinsic value of Plastic Pretzels stock? (Round your answer to 2 decimal places.)

b. What would you expect the price of this stock to be in one year if its current price is equal to its intrinsic value? (Round your answer to 4 decimal places.)

c. If you were to buy Plastic Pretzels stock now and sell it after receiving the dividend one year from now, what would be your holding period return (HPR)? (Round your answer to 2 decimal places.)

d. If you are able to purchase the stock for $20.40 instead of its intrinsic value today, what would be the holding period return? (Round your answer to 2 decimal places. Indicate negative values with a minus sign.)

Reference no: EM131984355

Questions Cloud

What is the reason that no writing system in existence : What is the reason that no writing system in existence, except for the IPA (which has not been adopted by any language),
Keeping our core value of professional development in mind : Keeping our core value of professional development in mind, what skills of the actor could you see being of use in your line of work?
What is effective annual interest rate : Your credit card bill states that your APR is 18%. What is the effective annual interest rate?
Tools for designing electronic communication : Discuss the standards and tools for designing electronic communication.
Current intrinsic value of plastic pretzels stock : What is the current intrinsic value of Plastic Pretzels stock?
Explain how revising and editing can make documents : Explain how revising and editing can make documents, presentations, and visuals more accessible, comprehensible, and usable.
Expected one year holding period return : What is the intrinsic value of a share of Xyrong stock? what is your expected 1-year holding-period return on Xyrong stock?
Required to make monthly payments : You’re required to make monthly payments. What is the ‘periodic rate’ you’re paying? What is the EAR they’re charging?
What is the maximum price you would pay for sunblocker : Which security would be considered a good buy based upon the equilibrium CAPM model?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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