Investors expectation of the price

Assignment Help Finance Basics
Reference no: EM132134776

A share of stock with a beta of 0.71 now sells for $46. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market risk premium is 7%. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM132134776

Questions Cloud

Set up and solve a valuation : Set up and solve a valuation for thew following non-constant growth stock:
Explain the systematic risk principle : Explain the systematic risk principle and how it relates to beta. according to the below message
What are the worst case and best case running times : What are the worst case and best case running times for this sorting algorithm? Give concrete examples on when that happens.
How much money was raised from the sale of the bonds : Whipple Corp. just issued 320,000 bonds with a coupon rate of 6.26 percent paid semiannually that mature in 25 years. The bonds have a YTM of 6.70 percent
Investors expectation of the price : A share of stock with a beta of 0.71 now sells for $46. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market
How much money is in your account : How much money is in your account 5 years from now? (your first deposit will be exactly 1 year from now and your last deposit will be 5 years from now)
What is the value of inheritance : A trust agreement you inherit from your great aunt states that you are to receive $2,000 on the first day of each year, starting immediately
How much will the automobile be worth ten : The value of your classic $158,600 antique automobile increases by 8.35 percent annually, how much will the automobile be worth ten years from now?
Find the yield to maturity : A corporation has an outstanding bond with the following characteristics:

Reviews

Write a Review

Finance Basics Questions & Answers

  Determining time value of money concepts

The IF for the future value of annuity is 4.5 at 10% for 4 years. If we wish to accumulate $8,000 by the end of 4 years, how much should the annual payments be?

  What arbitrage would you take

Assume that the gama index spot price is at 12,000, the risk free rate is 3% and the continuous dividend yield on the index is 0%.

  A firm sense of the proposed investment

Read the following Instructions and write 6-8 pages paper as per as given instructions. Your paper must include headings before started each new section.For this assignment the company I selected is Nordstrom, Inc. Include 6-8 scholarly relevant refe..

  Change some of the critical numbers

Create an interactive spreadsheet that allows the viewer to change some of the critical numbers to realize the possible risks involved with different variables.

  How expansionary activities conducted by the federal reserve

Describe how expansionary activities conducted by the Federal Reserve impact credit availability, the money supply, interest rates, and security prices.

  Venture capital vc method valuation concepts

Fuji Electronics has examined other recent acquisitions in BioSystems' industry and believes that a 17 times price-earnings multiple would be appropriate for determining BioSystems value in the future.  Calculate the value of BioSystems as of the end..

  Reinegar corporations has just issued a 25 year par bond

problem 1bond abond bunitmaturity47yearscoupon56annualprice101.79102.85-you know for certain that the 3 year rate in 4

  Toms hardware has inventory of 318000 equity of 421800

toms hardware has inventory of 318000 equity of 421800 total assets of 647700 and sales of 687400. what is the

  At the beginning of 2013 vhf industries acquired machine

at the beginning of 2013 vhf industries acquired a machine with a fair market value of 9947400 by issuing a three-year

  Calculate the expected return on stock of time saver

Calculate the expected return on stock of Time Saver Inc.: Economic recession 18% 5.3%

  Explain expected gain from the acquisitions

Explain expected gain from the acquisitions and what is the NPV of the acquisition to HC shareholders if it costs an average of $30 per share to acquire all of the outstanding shares

  What do you think was happening in the eurobond market

What do you think was happening in the Eurobond market?

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