User Account

All Pages

Firm needs to plow back its earnings to fuel growth

Assignment Help Financial Management
Reference no: EM131584125

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $15 per share dividend 10 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 14.5 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131584125

Questions Cloud

What went well with the meal : What went well with the meal? What were some difficulties or challenges with the meal?
Components of a performance-focused culture : Consider the "Components of a Performance-Focused Culture" outlined in our HR Management textbook.
Identify the factors that can affect the distribution : Identify the factors that can affect the distribution of a toxicant in the body. Explain how manipulation of these factors can increase toxicity.
Compute the project internal rate of return : Compute the project's internal rate of return to the nearest whole percent. Compute the project's simple rate of return
Firm needs to plow back its earnings to fuel growth : No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth.
How the company will conduct the testing : What are the workers expectations of privacy in the company and privacy rights with regards to equipment and physical facilities.
Explain the role the epidemiologist would play : Explain the role the epidemiologist would play in responding to this outbreak. Explain what measures the epidemiologist would use to describe the outbreak.
Explain the concepts of groupthink and social loafing : Compare and contrast stages of team development between face-to-face and virtual teams? What types of challenges might occur within both types of teams?
Create a demographic timeline for one industrialized country : Create a demographic and environmental timeline for one industrialized country, excluding the United States. Environmental impact of this transition.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the net present value of the project

You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows: Years Cash Flow 0 – 100 1–10 + 14 On the basis of the behavior of the firm’s stock, you b..

  What apr rate should you charge your customers

To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. - What APR rate should you charge your customers?

  Credit card fees and delivery services

Where can the medical center reduce these fixed costs? Credit card fees. Delivery services

  Market interest rates increase

You are considering investing in a $1000 face value 9% semi-annual coupon bond with 10 years left to maturity. Similar bonds are yielding 10% in the market, so the current price of this bond is _______, and if market interest rates increase to 11% th..

  Constant-growth dividend discount model

A firm pays a current dividend of $2, which is expected to grow at a rate of 8% indefinitely. If the current value of the firm’s shares is $54, what is the required return applicable to the investment based on the constant-growth dividend discount mo..

  What is yield to maturity-market expectation of growth rate

A zero-coupon bond with face value $1,000 and maturity of 6 years sells for $846.0. What is its yield to maturity? Computer stocks currently provide a required rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 p..

  Do you think political pressure is actually eliminated

Do you think political pressure is actually eliminated? Do you think attempting to eliminate political pressure is actually a good thing?

  Software instruction manuals plans to expand distribution

A distributor of computer software instruction manuals plans to expand distribution.

  Conventional departmental organization by function

Production starts in the drilling department, where each fitting requires an average of one minute on a CNC machine. Because of the length of time required to set up a CNC machine to produce a certain model, the fittings are produced in batches of 2,..

  Project has an initial cost and expected net cash inflows

A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%.

  Annual and the monthly effective interest rates

The final purchase price is $400,000 and, if you need a mortgage from the bank, your down payment will have to be 20% of the purchase price. The mortgage is a 30-year fixed rate loan with an Annual Percentage Rate (APR) of 4.20%. Compute both the ann..

  Find the operating cash flow for year

Find the operating cash flow for the year for Harper Brothers Incorporated if they had sales revenue of $302,100,000,

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd