Pay for additional shares of this stock

Assignment Help Financial Management
Reference no: EM131510876

You own shares of ABC Corporation, which just paid a dividend of $1.34 per share. You have projected a long-term constant growth rate for the dividends of 7.1%. If your required rate of return on the stock is 10.3%, what is the highest price that you would be willing to pay for additional shares of this stock? (Show your answer to the nearest penny)

Reference no: EM131510876

Questions Cloud

What is the IRR for each of these projects : What is the IRR for each of these projects? At what discount rate would you be indifferent between these two projects?
What is the yield to maturity on the companys debt : A corporation has 20,000,000 shares of stock outstanding at a price of $50 per share. What is the yield to maturity on the company’s debt?
Transactions relating to the long-term issuance of bonds : A transactions relating to the long-term issuance of bonds of J & J.:
Stock under the discounted cash flow model : what is the expected rate of return for this stock under the discounted cash flow model?
Pay for additional shares of this stock : what is the highest price that you would be willing to pay for additional shares of this stock?
Consistent dividends that grow at a constant rate : ABC pays consistent dividends that grow at a constant rate. what is the projected long-term growth rate of the dividends?
What price would you expect to pay for the stock : what price would you expect to pay for the stock?
Calculate the present value of these cash flows : Calculate the present value of these cash flows using an 11 percent discount rate.
Security market line-market risk premium : Security market line (SML) assume that the risk free rate RF, is currently 6% and that the market return RM, The market risk premium is

Reviews

Write a Review

Financial Management Questions & Answers

  What is the yield to maturity and yield to call

A firm's bonds have a maturity of 10 years with a $1,000 face value, have an 8% coupon rate paid semi annually, and are callable in 5 years at $1050. They currently sell at a price of $1,100. What is the yield to call? What is the yield to maturity?

  Value of remaining equity after buyback

Global Works Inc.(GWI) is an all equity firm, currently worth $ 100 million. Costof equity capital is 20%. The CFO has pitched an exciting idea to the board. She astutelypoints out that GWI can borrow at a much lower rate than its cost of equity capi..

  What is the current yield or cost of the preferred stock

NPerpetuity, Inc. issued $1,000 par value preferred stock 20 years ago. The stock provided a 7.50 percent yield at the time of issue. The preferred stock is now selling for $1,162.79. What is the current yield or cost of the preferred stock?

  Compute the standard estimator of the volatility parameter

Consider the following collection of n=9 closing for stock ABC: 101.02, 102.23, 100.34, 99.87, 98.65, 96.45, 98.45, 99.00, 100.05. Compute the standard estimator of the volatility parameter σ using these closing prices.

  Stock has returns-probability range

A stock has returns of 5 percent, 18 percent, −19 percent, and 18 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?

  What is the earnings per share figure

Pharrell, Inc., has sales of $597,000, costs of $261,000, depreciation expense of $65,000, interest expense of $32,000, and a tax rate of 35 percent. The firm paid out $42,000 in cash dividends and has 52,000 shares of common stock outstanding. What ..

  Shares of preferred stock outstanding which pay dividend

XYZ corp. currently has 50 million shares of common stock outstanding. Their current market price is $80 per share and have a beta of 1.15. XYZ has $1 billion of bonds outstanding, each with the market value of $1100. It is known that the yield to ma..

  Develop and describe a strategic measurement

develop and describe a strategic measurement ldquoscorecardrdquo that might be incorporated with the financial measures

  Associated with the clean-up of an environmental site

Assume that you are attempting to fund a $50,000,000 liability associated with the clean-up of an environmental site that will be due in seven years.  If you don't meet the liability you will be out of business.  You have an amount of money to invest..

  Long-term certificate of deposit

You need $24,356 at the end of 9 years, and your only investment outlet is an 11 percent long-term certificate of deposit.

  About production costs associated with the new machine

Keener Clothiers Inc. is considering investing $2 million in an automatic sewing machine to produce a newly designed line of dresses. The dresses will be priced at $200, and management expects to sell 12,000 per year for six years. There is, however,..

  Calculate the net present value and benefit cost ratio

The parks department is considering building a new pool. If the project is approved, the pool will be constructed in 2016 for a total cost of $400,000 to be paid from the cash reserves of the department. calculate the Net Present Value (NPV) and Bene..

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