Nu-platinum is highly successful mining company

Assignment Help Financial Management

Reference no: EM131062849

Nu-platinum is a highly successful mining company. The company just paid a dividend on the stock of $0.60. Business has been growing well over the past few years and is expected to do so at 25% for the next 3 years. The company will then expect growth to slow 7% for the forseeable future. Mining is a risky business and this stock is viewed as risky thus you require a 20% return. A) draw a time line of the dividends over the next 5 years B) If the required return is 20% what is the price of the stock after year 3? C) What is the price of the stock today?

Reference no: EM131062849

Questions Cloud

Calculate the arithmetic return and geometric return : You are given the returns for the following three stocks: Year Stock A Stock B Stock C 1 14 % 14 % −19 % 2 14 14 34 3 14 22 37 4 14 7 14 5 14 13 4 Calculate the arithmetic return, geometric return, and standard deviation for each stock.

Requires initial investment in spare parts inventory : Massey Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $380,000 is estimated to result in $145,000 in annual pretax cost savings. The press also requires an initial investment in sp..

Firm is considering investing in project with cash flows : Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the pr..

Should the project be accepted or rejected : Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. Should the project be accepted or rejected?

Nu-platinum is highly successful mining company : Nu-platinum is a highly successful mining company. The company just paid a dividend on the stock of $0.60. Business has been growing well over the past few years and is expected to do so at 25% for the next 3 years. If the required return is 20% what..

Attorney concerning the sales agreement and the items : According to Cheeseman (2010), “Real property is immovable or attached to immovable land or buildings; Considering the definition of real property and personal property, how would you classify each item? Present your rationale based on the difference..

The project be accepted or rejected : Compute the payback statistic for Project B if the appropriate cost of capital is 12 percent and the maximum allowable payback period is three years. (Round your answer to 2 decimal places. If the project never pays back, then enter a "0" (zero).) Pr..

Use of truck will require increase-spare parts inventory : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $70,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $19,000. Use of the truck wil..

The cost of equity and flotation costs : Messman Manufacturing will issue common stock to the public for $40. The expected dividend and growth in dividends are $2.75 per share and 5%, respectively. If the flotation cost is 14% of the issue's gross proceeds, what is the cost of external equi..

User Account

All Pages