Find the theoretical price of the stock to yield an investor

Assignment Help Financial Management

Reference no: EM131082741

A stock pays annual dividends at the end of each year. The earnings per share in the year just ended were $102. Earnings are assumed to grow at 7.3% per year in the future. The percentage of earnings paid out as a dividend will be 15% for the next 3 years, and 55% after that. Find the theoretical price of the stock to yield an investor 7.9% effective.

Reference no: EM131082741

Questions Cloud

Find the duration of the plan obligations : A pension plan is obligated to make disbursements of $2.7 million, $3.7 million, and $2.7 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually.

Technique used to evaluate after tax operating cash flows : One basic technique used to evaluate after tax operating cash flows is to: a. subtract cash expenses from noncash charges b. add noncash charges to net income c. subtract depreciation from operating revenues d. add cash expenses to net income

What is the total market value of this firm : The current stock price for a company is $35 per share, and there are 2 million shares outstanding. This firm also has 90,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 8%, 7 years to maturity, a..

What is the cost of existing and new preferred stock : Toto and Associates' preferred stock is selling for $27.50 per share. The firm nets $25.60 after issuance costs. The stock pays an annual dividend of $3.00 per share. What is the cost of existing, and new, preferred stock respectively?

Find the theoretical price of the stock to yield an investor : A stock pays annual dividends at the end of each year. The earnings per share in the year just ended were $102. Earnings are assumed to grow at 7.3% per year in the future. The percentage of earnings paid out as a dividend will be 15% for the next 3 ..

What would be the investors realized yield : A company issues a bond with a par value of $1,000 and a maturity of 15 years. the bond pays an annual coupon of 8%.if an investor purchased a bond of $1,078 and sold it for 2 years later for $952, what would be the investors realized yield?

Find the time and amount of the final payment : Then answer the following questions. A loan of $1000 is to be repaid by annual payments of $100 to begin at the end of the year and continue thereafter for as long as necessary. Find the time and amount of the final payment, assuming that the final p..

What after-tax net cash flow will western receive : Western Textiles is trying to determine whether to purchase a new weaving machine that costs $214,000. It would cost another $26,000 to install the machine. If its marginal tax rate is 40 percent, what after-tax net cash flow will Western receive whe..

What is npv-oxygen optimization would compute for project : A number companies, Including Lichfield Design and Oxygen Optimization are considering undertaking project A which is believed by all to have a level of risk that is equal to that of the average-risk protect at Litchifield design. What is the NPV tha..

User Account

All Pages