Find the dividends over the next five years

Assignment Help Financial Management

Reference no: EM132008488

Suppose that a firm's recent earnings per share and dividend per share are $3.20 and $2.20, respectively. Both are expected to grow at 8 percent. However, the firm's current P/E ratio of 31 seems high for this growth rate. The P/E ratio is expected to fall to 27 within five years. Compute the dividends over the next five years.

Compute the value of this stock in five years.

Calculate the present value of these cash flows using a 10 percent discount rate.

Reference no: EM132008488

Questions Cloud

What is the role of internal controls in complying with sox : Write a 200- to 350-word response to the capstone discussion question. What is the role of internal controls in complying with SOX (2002)

Type of compensation an employee receives : Do you agree that the amount and/or type of compensation an employee receives can affect his or her behavior? Why, or why not?

Which of the four psychological approaches to change : Which of the four psychological approaches to change (Behavioural, cognitive, psycho dynamic and humanistic) were evident through the change?

Contrast the sales process of their retail store operation : Contrast the sales process of their retail store operation with the sales process in an online store environment. Would any of the events in the process change

Find the dividends over the next five years : Compute the value of this stock in five years. Calculate the present value of these cash flows using a 10 percent discount rate.

Discuss why each of six areas specified by audit committee : Briefly discuss why each of the six areas specified by the audit committee may or may not be appropriate for this assurance engagement

Sustainability inevitably conflicts with business objectives : Design for sustainability inevitably conflicts with business objectives. Critically discuss.

How low would the interest rate on the loan with balance : The interest rate on the $750,000 loan is 8.5 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose i

Explain the use of a quantity schedule : Explain the use of a quantity schedule. Who gives us the information regarding the percentage of units completed in a department

User Account

All Pages