Estimate the price of EFT Limited shares

Assignment Help Accounting Basics
Reference no: EM133021012

Question - Below is the following information about EFT Limited, a manufacturer of cleaning products:

Its most recent dividend was $2.00 per share.

The dividend is expected to grow at 10% for the next three years, then decline to 4% forever.

According to the CAPM the required return for EFT Limited is 15%.

(a) Estimate the price of EFT Limited shares

(b) If the beta of EFT Limited fell, what do you expect would happen to the price of its shares?

Reference no: EM133021012

Questions Cloud

Type of contract language : Both of those organizations terminated their contracts with Lance Armstrong upon the news that he admitted that he continually lied about using performance enha
What annual rate of return would Jia need to earn : Question - What annual rate of return would Jia need to earn if she deposits? $20,000 per year into an account beginning one year from today
What is the easiest and hardest part of a business report : What is the easiest and hardest part of a business report and why
Maximize domain effectiveness as it relates to value chain : Reference the "Executive Officer" section on pages 15-17 of HP's 2014 10-K statement. Leverage your knowledge about functional structures to determine which of
Estimate the price of EFT Limited shares : The dividend is expected to grow at 10% for the next three years, then decline to 4% forever. Estimate the price of EFT Limited shares
Main features of qualitative and quantitative research : Explain and compare the main features of qualitative and quantitative research. When it is more appropriate to use one or the other? When would be appropriate t
Facing companies doing business in a global context : What are some of the key ethical questions facing companies doing business in a global context? What is your view of how well business has done in facing and ad
Examine the strategic options : Suppose DAK Corporation plans to open its factories in Brazil, where culture and socio-economic context is dramatically different from other countries.
Compute ms pope recognized gain on sale : At the beginning of 2020, Ms. Pope purchased a 15 percent interest in PPY Partnership for $23,000. Compute Ms Pope recognized gain on sale

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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