Solution-Find the required rate of return on shares

Find the required rate of return on shares

Assignment Help Finance Basics

Reference no: EM133111239

Hot Co had earnings in the last period of $4 per share. Earnings are growing at a constant rate of 6%, and expected to continue growth at that rate. Management of Hot Co, estimates that the required rate of return on their shares is 10%. They would like to target a trading price for their shares at $20/sh. The dividend payout ratio that most closely meets their objective is:

-50%

-60%

-70%

-80%

-None of the above

Reference no: EM133111239

Questions Cloud

What is the bond modified duration : Clifton Ltd. has just issued a three-year bond with face value £100 and a coupon rate of 3% per year. Coupons are paid semi-annually. The term structure of inte

Calculate the dollor amount of interest : Calculate the dollor amount of interest for a $10,000 in savings account receiving 6% pa non compounding interest over 3 yrs.

Equal employment opportunity and safe workplace : Prior to beginning work on this discussion forum read Chapter 3: Providing Equal Employment Opportunity and a Safe Workplace

Case Equity Securities - GAAP versus IASB Standards : Compare and contrast U.S. GAAP for investments in equity securities under SFAS No. 115 with the provisions of IAS No. 39

Find the required rate of return on shares : Hot Co had earnings in the last period of $4 per share. Earnings are growing at a constant rate of 6%, and expected to continue growth at that rate.

Future value and present value : What is the difference between future value and present value? Which approach is generally preferred by financial managers?

Reason for the variance in cost level : Imagine that you are conducting various financial analyses of competing companies of similar size in a particular industry. In these analyses you conclude that

Fulfill the nutritional requirements of the people : The main aim of nestle Malaysia is to meet the nutritional needs. To fulfill the nutritional requirements of the people by providing them quality food. The stra

Efficient market hypothesis : Relate towards market efficiency and discuss scenarios? In terms of efficient market hypothesis, do any violate any forms?

User Account

All Pages

Find the required rate of return on shares

Reference no: EM133111239

Reference no: EM133111239

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT