Earnings growth comes from investment of retained earnings

Assignment Help Financial Management

Reference no: EM131997927

Halliford Corporation expects to have earnings this coming year of $ 2.713 per share. Halliford plans to retain all of its earnings for the next two years.? Then, for the subsequent two? years, the firm will retain 55 % of its earnings. It will retain 20 % of its earnings from that point onward. Each? year, retained earnings will be invested in new projects with an expected return of 23.2 % per year. Any earnings that are not retained will be paid out as dividends. Assume? Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If? Halliford's equity cost of capital is 10.9 %?, what price would you estimate for Halliford? stock?

The stock price will be ?$ ___?____ ?(Round to the nearest? cent.)

Reference no: EM131997927

Questions Cloud

What will these bonds sell at issuance : Penzverde Corp. needs to raise funds to finance a plant expansion. What will these bonds sell at issuance?

The aggregate expected profits to informed investors in ipo : What are the aggregate expected profits to informed investors in an IPO if the offer price is set at the expected value of an IPO of unknown type?

Coupon bond paying coupons semiannually is callable : What is the yield to call if the call price is only $1,125?

Present value interest factor for such stream of cash flows : How can the present value interest factor for such a stream of cash flows be determined?

Earnings growth comes from investment of retained earnings : Assume? Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings.

How is cash flow different than net income : How is cash flow different than net income? What are some items included in the cash flow statement that are not included in the profit and loss statement?

Find out the european put option price : Find out the European put option price with same underlying asset, same maturity and strike price.

What is the standard deviation of the analyst profit : What is the expected return (in dollars), and what is the standard deviation of the analyst’s profit?

What is the price of the bond if the investor yield : What is the price of the bond if the investor’s yield (the “yield-to-worst”) is 9.5%?

User Account

All Pages