Find the price per share of verizon stock

Assignment Help Accounting Basics
Reference no: EM133187342

Question - Verizon paid a dividend of $3 per share yesterday. The company announced that they plan to increase their dividend by $1 per share for each of the next three years ($4 a year from now, $5 two years from now, and $6 three years from now). After that, they plan to keep their dividend at $6 per share forever. The variance of Verizon's stock is .49, the variance of the market is .0625, and the correlation between Verizon's stock and the market is 0.4. The risk-free rate is 3.0% and the market-risk premium is 5.7%. Verizon has 100 million shares of stock outstanding and $50 million of debt. The YTM for its debt is 8.0%. Use the dividend discount model to find the price per share of Verizon's stock.

Reference no: EM133187342

Questions Cloud

Create infographic highlighting new program : Create an infographic highlighting the new program or policy in a way that employees will understand and support. Some free infographic tools include Piktochart
Examine any three determinants of the exchange rate : Examine any three determinants of the exchange rate between the Zimbabwean dollar and the United Kingdom (UK) pound
Discuss what considerations go into price : Discuss what considerations go into price, especially when entering foreign markets. You should also discuss the supply chain issues of the past year as well as
Unrealistic body images and expectations : What actions and changes can Zara implement into their brand in order to "correct" unrealistic body images and expectations?
Find the price per share of verizon stock : Verizon paid a dividend of $3 per share yesterday. The YTM for its debt is 8.0%. Use the dividend discount model to find the price per share of Verizon's stock
Media portrayal of race and ethnicity changed perception : How has the media's portrayal of race and ethnicity changed your perception? Share your thoughts and opinion on privacy in discussion.
An old babylonian version of the gilgamesh epic : To appreciate the impressive length of the history of strategic leadership we will refer to the epic story of Gilgamesh-most likely the oldest leadership story
Which two balances will not appear on the income statement : Revenues $100,000 rent expense $40,000 dividends paid $12,000, Which two balances will not appear on the income statement
Determine the total for non-current assets amounts : Given that property is R1,000,000, Vehicles R95,000, Equipment, R140,000 and unfavourable bank balance R75,000. Determine the total for non-current assets

Reviews

Write a Review

Accounting Basics Questions & Answers

  What journal entries are needed to record each subsidy

RRT received cash subsidies from Orange County ($500,000) and the state ($100,000) to help cover its operating deficits.

  What will be effect on net income

On January 2, Bailey Company paid $20,000 to purchase equipment that has a useful life of 8 years. What will be effect on Net income

  Discuss possible ways to address the difficulties

What are the steps involved in the preparation of an advance plan for the distribution of cash in a partnership liquidation to determine which step is the most difficult to execute correctly. Discuss possible ways to address the difficulties you i..

  Prepare journal entries to account for the transactions

Prepare journal entries to account for the transactions during 2020 (assuming the retirements were the first ever recorded by The Data Group Inc.)

  What is the average receivables balance

Sweet Shop has credit sales of $450,000 yearly with customers paying on average in 70 days. What is the average receivables balance

  What is the amount of NOL that Sinopia may use

What is the amount of NOL that Sinopia may use in the current year? What is the net present value of the NOL carried forward to future years

  How is liquidity both beneficial and harmful to a firm

How is liquidity both beneficial and harmful to a firm? Describe the primary advantages and disadvantages of each of the types of business organization

  Calculate the total fixed cost

Hercules Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost

  Technology affected marketing

How has technology affected marketing? What types of new technologies are organizations using to market their products and services to both buyers and sellers?

  Construct spreadsheet that calculates the newsvendor profit

Construct a spreadsheet that calculates the newsvendor's profit for any number of papers purchased at the beginning of the day

  Determine the annual inflation and stock returns

The following are data on annual inflation and stock returns. Run a regression analysis of the data and determine whether there is a linear relationship.

  What rate of return are you earning on this policy

You just paid £350,000 for a policy that will pay you and your heirs £12,000 a year forever. What rate of return are you earning on this policy

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