Determine the price of today stocks for each

Assignment Help Business Management

Reference no: EM133650070

Question

1) Assume you are a financial manager, managing your client investment. Your client has three options of investment as presented below.

Investment 1 : YangLang Inc's common stock current dividend (Do) is RM0.40, and is expected to grow at a rate of 6% annually.

Investment 2 : Alamanda Inc's dividend will grow at a rate of 40% this year, 25% next year, 23% and 10% thereafter. The current dividend (Do) is RM0.80.

Investment 3 : Chamomile Inc's preferred stock pays a RM2.75 dividend.

From the above information you are required to:

i) determine the price of today's stocks for each, if the required rate of return is 15%,

ii) based on your answer in part (a) recommend which stock is the best for your client to invest in. Explain your recommendation.

2) Rose and Petal bonds, have a coupon rate of 8% and a par value of RMI 000, and will mature in 20 years. If you require a return of 7%, what price would you be willing to pay for the bond?

Reference no: EM133650070

Questions Cloud

What drugs are resistant to candida : why would candida become antibiotic resistant and what kind of infections candida create - what can we do as consumers to combat the spread of candida

Explain systems implementation phase to the project team : Describe application development process involved in the systems implementation phase including coding, testing, documentation, and implementation planning.

What does the phenotype of the transformed colonies tell you : What does the phenotype of the transformed colonies tell you? (Bacterias were transformed to be resistant to ampicilin)

Business is in terms of financial performance : We hold the view that in order to initiate and keep our business as a viable entity we must know where our business is in terms of financial performance.

Determine the price of today stocks for each : Determine the price of today's stocks for each, if the required rate of return is 15%, what price would you be willing to pay for the bond?

How siamese cats change their colors : How Siamese cats change their colors: A genetic mutation known as the Himalayan gene has made this breed's fur extra sensitive to temperature-but also leaves

Explain why you think the argument fits the concept : Explain why you think the argument fits this concept. Also, identify if this was purposeful and why, and how this affects the strength of the argument.

What would be the rh if the specific humidity : saturation specific humidity is 10 gkg ? What would be the RH if the specific humidity is 6 but saturation specific humidity changed to 20 at 25

What precipitation lifting mechanisms : What precipitation lifting mechanisms would you expect to find on a tropical island? What precipitation lifting mechanisms would you not expect to find

User Account

All Pages