Expected ex-dividend price

Assignment Help Basic Statistics
Reference no: EM132012188

One-period pricing.) Recall that since stocks have really long lives, in the video we first imagined owning a stock for only one period. In this simple, yet powerful scenario, today's stock price is the PV of next year's dividend and next year's stock price.) The stock of Alydar Oil, an all-equity firm, is currently trading at $46 per share, after just having paid a $2.50 per share dividend. The market expects a dividend of $3.20 per share to be paid one year from today. If the equity cost of capital (same as discount rate for equity) is 9% for this firm, the expected ex-dividend price (the stock price after the dividend is paid next year) in one year (t = 1) should be closest to:

Reference no: EM132012188

Questions Cloud

What is market risk premium : What is the market risk premium (rM - rRF)? The risk-free rate is 5.5%, and the market is in equilibrium. What is the beta of Fund P?
Are current expenditures further categorized by function : Are assets and liabilities reported either in the relative order of their liquidity or on a classified basis on the statement of net position?
Expected price per share of the company in one year : Current dividend yield (DIV1/P0) is 6.00%, the expected price per share of the company in one year (t = 1) is closest to?
What information would you find on each statement : As a small business owner in today's economy, what three financial reports would you use on a regular basis? What information would you find on each statement?
Expected ex-dividend price : If the equity cost of capital (same as discount rate for equity) is 9% for this firm, the expected ex-dividend price
What is the stock expected price one years from today : If its required return is 12%, what is the stock's expected price 1 years from today?
Discuss the tax consequences of contributing cash : Discuss the tax consequences of contributing cash, property, and/or services to the new entity (discuss only for the entity you have recommended).
What is the discounted cash flow concept : What is the discounted cash flow concept, and why is it essential for financial managers to understand and employ this important concept?
House appreciation and mortgage payment : House Appreciation and Mortgage Payments. Say that you purchase a house for $260,000 by getting a mortgage for $230,000 and paying a $30,000 down payment.

Reviews

Write a Review

Basic Statistics Questions & Answers

  What are the null and alternative hypotheses for given test

What are the null and alternative hypotheses for this test?- For each sample, construct the 95% confidence interval for the population mean.

  Probability of getting exactly three heads

A fair coin is tossed 6 times. What is the probability of getting exactly 3 heads in the 6 tosses?

  Relationship between confidence intervals

Can you give a general rule as to what happens with confidence intervals as a function of sample sizes and confidence levels? What are the trade-offs?

  Explanatory variable represents

Suppose that in a regression analysis, the explanatory variable represents temperature, and the explanatory variable represents whether or not an individual is a male or female. Which statement is the most accurate given this information?

  Major events regarding the information age

Write an essay discussing the major events regarding the Information Age that took place from the 1980s to early 2000s. What is the significance of the events you identify to the Information Age and their impact on our lives?

  Calculate the payback period of an investment

Calculate the payback period of an investment which will require a cash outlay of $104199 but is expected to generate cash inflows of $25406 a year?

  Let x be the damage incurred in in a certain type of

let x be the damage incurred in in a certain type of accident during a given year. possible x values are 0 1000 5000

  Find the sample correlation coefficient

Construct a scatter plot of the data. Describe the relationship between average finish and winnings.- Find the sample correlation coefficient. Is the value of r consistent with your interpretation in part (a)? Why or why not?

  A subset of the data obtained by featherston

The data in Table 8.3 are a subset of the data obtained by Featherston (1971). Among other things, he was interested in the relationship between the weight of tapeworms (Taenia hydatigena) fed to dogs and the weight of the scoleces recovered from ..

  What is the probability that you will accept the shipment

Your firm manufactures computers. You are sent a very large shipment of chips by a supplier. You want to accept this shipment only if ten percent or less of the chips are defective, which is the supplier's claim. Your procedure for deciding whether t..

  What is the coefficient of variation

Draw frequency distributions that have- positive skewness, negative skew- ness,

  How to keep promise using response times for the first month

The response times for the first month are 26, 30, 28, 29, 25, 28, 32, 35, 24, 23 min. Using the .05 significance level, did she keep her promise?

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