Nonconstant growth valuation-stock current price

Assignment Help Financial Management

Reference no: EM131316512

Nonconstant Growth Valuation A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 24% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1, the risk-free rate is 8%, and the market risk premium is 3%. What is your estimate of the stock's current price?

Reference no: EM131316512

Questions Cloud

Find the natural frequencies as a function of the mass m : A plate of mass m, supported by a slender straight beam as shown in the Fig. P5.7, vibrates while sinusoidal force is applied to the center of the plate. Find the natural frequencies as a function of the mass m, flexural rigidity EI of the beam, a..

Calculate the binomial interest rate tree : Assume annual compounding of interest for these problems. Assume 10% annual interest rate volatility. Calculate the binomial interest rate tree using the 2-year on-the-run issue and the 3-year on-the-run issue.

Define pm assessment in context of the pmo : For this assignment, address the following items: Define PM assessment in context of the PMO infrastructure management. Describe the primary domains of encompassing PMO assessment

Write program that calculate and prints the monthly paycheck : Write a program that calculates and prints the monthly paycheck for an employee. The net pay is calculated after taking the following deductions: Federal Income Tax: 15%.

Nonconstant growth valuation-stock current price : Nonconstant Growth Valuation A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 24% per year for the next 2 years, then at a constant rate of 5% thereafter. The compan..

Write a main program that first reads all available meals : Write a main program that first reads all available meals from a file called menu.txt. Write a function called create_event. This function is be called if a customer of the company wants to book an event.

Find inertial force acting on the man at the position shown : A man walks along a guide at a constant velocity υ on a disk in the vertical direction in Fig. P5.2 while the disk rotates at a constant angular velocity ω. Find the inertial force acting on the man at the position shown.

Current and projected free cash flows-horizon value : Current and projected free cash flows for Radell Global Operations are shown below. Actual 2013 2014 Projected 2015 2016 Free cash flow $619.52 $680.20 $720.25 $763.47 (millions of dollars) Growth is expected to be constant after 2015, and the weight..

Write a burger tycoon project paper : Each student is to write a Burger Tycoon Project paper (1-2 typed pages, single spaced, professionally prepared) which is due at the last class session

User Account

All Pages