Market capitalization rate

Assignment Help Finance Basics
Reference no: EM131734492

Consider the following three stocks: a.Stock A is expected to provide a dividend of $10 a share forever.

b.Stock B is expected to pay a dividend of $5 next year. Thereafter, dividend growth is expected to be 4% a year forever.

c.Stock C is expected to pay a dividend of $5 next year. Thereafter, dividend growth is expected to be 20% a year for five years (i.e., until year 6) and zero thereafter.

a-1.If the market capitalization rate for each stock is 10%, what is the stock price for each of the stocks?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Reference no: EM131734492

Questions Cloud

Start your business 10 years from now : If the account earns 8% compounded annually, how much will you have when you start your business 10 years from now?
Explain what is meant by an amortizing mortgage : Explain what is meant by an amortizing mortgage.What are FHA's and VA's roles in the mortgage market?
Gross debt service ratio : If her bank requires a gross debt service ratio of no more than 30 percent, will Jane be able to obtain the mortgage? Please show all work!
What is the value of a six-month european : What is the value of a six-month European put option with a strike price of $50? Please show full working.
Market capitalization rate : Consider the following three stocks: a.Stock A is expected to provide a dividend of $10 a share forever.
Var for the portfolio from the delta : Estimate the one-day 95% VaR for the portfolio from the delta.
What is the name of license required for skin penetration : What is the name of the license required for skin penetration - What form must the client always complete - hat form would you complete in the event
Goodfellas personal finance : Goodfellas Personal Finance just paid a dividend of $20. Its dividends are expected to grow at a 50% annual rate for each of the next two years
What is the company current stock price : If Born's required return (rs) is 13%, what is the company's current stock price?

Reviews

Write a Review

Finance Basics Questions & Answers

  What role does the central banking system play within the

1. what role do financial institutions play within the global marketplace? 2. how can policies and regulations impact

  Contrast modifications you would make in evaluating project

Contrast the modifications you would make in evaluating the projects to increase internal capacity in North America with the modifications you would make in evaluating expansion projects in the global market.

  Ski tries to match the maturity of its assets and

ski tries to match the maturity of its assets and liabilities. describe how ski could adopt a more aggressive or a

  Research the pwm technology and write a summary report

A full-bridge three-phase rectifier supplies energy to a dc load of 300 V and 60 A from a three-phase bridge of 440 V through a ΔY transformer. Select a diode and specify the transformer for a voltage drop across each diode of 0.7 V and continuous..

  What is the rotor frequency for a 60 hz induction generator

Explain the difference between rotor speed and rotor frequency. For s = -0.01 and a rotor speed of 1740 rpm, what is the rotor frequency for a 60 Hz induction generator?

  The pragmatic nationalist view sees fdi as having

The pragmatic nationalist view sees FDI as having

  What is the average annual fee

Fidelity Advisor Asset Manager (FEYAX) charges a 5.75% upfront load plus reports an expense ratio of 1.12%. If an investor plan on holding a fund for 25 years, what is the average annual fee, as a percent, A. 6.76% B.1.35%, C.0.27%, D.5.79%"

  Initial value of mi equity is closest

Assume that the capital markets are perfect.Suppose that MI has zerominuscoupon debt with a $125 million face value due next year. The initial value of MI's equity is closest to:

  Create concern or wariness about a high margin business

Describe the circumstances that might create concern or wariness about a high margin business.

  Compute the additional investment in accounts receivable

Compute the incremental income after taxes that would result from these projections. Compute the additional investment in Accounts Receivable. Compute the incremental Return on New Investment.

  Price of the firm common stock

A new common stock issue that paid a $1.81 dividend last year.The firms dividends are expected to continue to grow 6.7% per year forever. The price of the firm's common stock is now $27.93.

  What was iron ore 2008 ebit

Iron Ore listed $35 million in depreciation expense and $55 million in taxes on its 2008 income statement. What was Iron Ore's 2008 EBIT?

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