If the stock sells for 36 per share what is your best

Assignment Help Finance Basics
Reference no: EM13572161

Stock in Dragula Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 4.90 percent. The company's most recent dividend was $1.30 per share, and dividends are expected to grow at a 8.0 percent annual rate indefinitely.

If the stock sells for $36 per share, what is your best estimate of the company's cost of equity?

Reference no: EM13572161

Questions Cloud

Division p of turbo corporation has the capacity for making : division p of turbo corporation has the capacity for making 75000 wheel sets per year and regularly sells 60000 each
It ended the year with 187500 of retained earnings versus : during 2009 pfizer paid out 52500 of common dividends. it ended the year with 187500 of retained earnings versus the
Based on a comparison of their net present values and : a company is considering two alternative investment opportunities each of which requires an initial cash outlay of
Grandma nelly has come to you for advice given her : grandma nelly has come to you for advice. given her excellent health and desire to spend your inheritance she has
If the stock sells for 36 per share what is your best : stock in dragula industries has a beta of 1.2. the market risk premium is 6 percent and t-bills are currently yielding
The intrinsic value of a warrant to buy 5 shares of dawn : the intrinsic value of a warrant to buy 5 shares of dawn stoneworks stock at 70 per share is 25. what is the current
Today the internet provides an unprecedented amount of : critiquing internet sourcestoday the internet provides an unprecedented amount of information by way of blogs videos
A company expects its three departments to yield the : a company expects its three departments to yield the following income for next year.dept. adept. bdept.
A company is planning to introduce a new portable tv to its : a company is planning to introduce a new portable tv to its existing product line. management must decide whether to

Reviews

Write a Review

Finance Basics Questions & Answers

  How the percent of sales method is developed

The "percent of sales method" is a method of preparing pro forma financial statements. Which of the following would be an example of how the "percent of sales method" is developed?

  Deployment specialists pays a current annual dividend of 1

deployment specialists pays a current annual dividend of 1 and is expected to grow at 24 for two years and then at 4

  A coupon rate of 9 percent paid annually the tax rate is 40

suppose a company will issue new 20-year debt with a par value of 1000 and a coupon rate of 9 percent paid annually.

  Identify and explain three types of earnings management

identify and explain three types of earnings management that can reduce earnings

  Interest rate swaps with no rate adjustmentsdell inc wants

interest rate swaps with no rate adjustments.dell inc. wants to borrow pounds and virgin airlines wants to borrow

  Determine the benefits

Identify one each one benefit, two disbenefit, and three monetary cost that would impact each of the following projects:

  The higher the tax rate the the net underwriting cost on

the higher the tax rate the the net underwriting cost on the new bond issuea - higherb - lowerc - higher or lowerd -

  What is the profit or loss associated with copper

Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper?

  What is the gain or loss on the futures contract

Suppose the December CBOT Treasury bond futures contract has a quoted price of 80-07. If annual interest rates go up by 1.00 percentage point, what is the gain or loss on the futures contract?

  What is the fair price for this portfoilio

The expiration date of the options are six months from now. The risk free interest rate is 5% per annum. What is the fair price for this portfoilio. Why?

  What is its debt-to-capital ratio

Bartley Barstools has a market/book ratio equal to 1. Its stock price is $14 per share and it has 5 million shares outstanding. The firm's total capital is $125 million and it finances with only debt and common equity. What is its debt-to-capital ..

  Formula for effective interest rate

Find out the formula we would employ to compute the effective interest rate offered on cash discounts?

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