Forecast firm l price in one year

Assignment Help Finance Basics
Reference no: EM132033237

Suppose that stock L sells for $35 today and is expected to pay a dividend of $1.00 at the end of one year. Firm L's beta is 1.20, the market expected return is 10%, and the riskless return is 3%. Using the CAPM and an assumption about market equilibrium, forecast Firm L's price in one year.

Reference no: EM132033237

Questions Cloud

Financial institution formed primarily to accept consumer : Base on my reading a thrift institution can be seen as a financial institution formed primarily to accept consumer deposits and make home mortgages
What is the present value of this stream of cash flows : If the current, effective, interest rate is 8.3% p.a., what is the present value of this stream of cash flows?
What amount should be used as initial cash flow for project : She wants to build a new facility on that site. The building cost is estimated at $1,170,000. What amount should be used as the initial cash flow
Production facility in central america : What is the aftertax salvage value from this sale if the tax rate is 34 percent?
Forecast firm l price in one year : Using the CAPM and an assumption about market equilibrium, forecast Firm L's price in one year.
What is the expected return on portfolio z : According to the capital asset pricing model, what is the expected return on Portfolio Z?
Write a vhdl description for a 4-bit shift register : Write a VHDL description for a 4-bit shift register. The shift register is to be negative edge triggered.
Funding amount a business would receive : What criteria does a Venture Capitalist firm use to decide on the funding amount a business would receive?
Approximate real rate of return on investment : Today, you sold your shares for $54.2 a share. What is your approximate real rate of return on this investment?

Reviews

Write a Review

Finance Basics Questions & Answers

  It is considering two hedging alternatives sell the euro

boeing just signed a contract to sell a boeing 737 aircraft to air france. air france will be billed euro20 million

  S the present value of the futures contract in dollars

Treasury bond futures contract settles at 105'8.  a. What is the present value of the futures contract in dollars? b. If the contract settles at 105-8, are current market interest rates higher or lower than the standardized rate on a futures contract..

  Discuss the objectives of corporate governance

Discuss the objectives of corporate governance and why this has led to increased costs for publicly traded companies.

  Prepare pdcs sales schedule purchases schedule and wages

short-term financial planning for the pdc company was described earlier in this chapter. refer to the pdc companys

  What is the internal growth rate

Last year Lakesha's Lounge Furniture Corporation had an ROA of 7.5% and a dividend payout ratio of 25%. What is the internal growth rate?

  What was your rate of return for the three-year period

The coupon rate was 6.5 percent with interest paid semiannually. Today, you sold that bond for $1,089.54. What was your rate of return for the 3-year period, or holding period yield, on this investment?

  What is the bond annual yield to maturity

What is the bon's annual yield to maturity? YOU MUST SHOW ALL WORK AND USE AT LEAST 4 DECIMAL PLACES.

  What is the cost of equity

Country Markets has an unlevered cost of capital of 12 percent, a tax rate of 38 percent, and expected earnings before interest and taxes of $15,700. The company has $11,000 in bonds outstanding that have a 6 percent coupon and pay interest annual..

  What are the earnings-per-share growth rates for given years

Sellers Wants to Buy (Medium) Mark Sellers, a hedge fund manager with Sellers Capital in Chicago, wrote a piece in the Financial Times on September 9, 2006.

  Determine the operating cash flow

Determine the operating cash flow (OCF) for Kleczka, Inc., based on the following data. (All values are in thousands of dollars.) During the year the firm had sales of $2,500, cost of goods sold totaled $1,800, operating expenses totaled $300, and de..

  A stocks returns have the following distribution demand for

a stocks returns have the following distributiondemand for the companys products probability of this demand occurring

  The price of wxo is $35 on the option expiration date

Purchased four WXO 32 call option contracts at a quoted prices of $.34. What is your net gain or loss on this investment if the price of WXO IS $35 on the option expiration date?

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