User Account

All Pages

Payback period of buying the stock and holding

Assignment Help Finance Basics
Reference no: EM132630426

A stock is expected to pay a dividend of $1020Its required total return is 50 in one year. Its future annual dividends are expected to grow by % pa. The next dividend of $10 will be in one year, and the year after that the dividend will be $12 (=10*(1+0.2)^1), and a year later $14.4 (=10*(1+0.2)^2) and so on forever.

% pa. The total required return and growth rate of dividends are given as effective annual rates.

Calculate the payback period of buying the stock and holding onto it forever, assuming that the dividends are received as at each time, not smoothly over each year. Note that you will have to find the price of the stock first.

Reference no: EM132630426

Questions Cloud

Describe at least five examples of social exchange : Describe at least five examples of social exchange that you noticed and discuss the potential impact (helpful, disruptive, etc.) on the individuals involved.
Define compensation and its effect on employee behaviors : For this assignment, you will identify and address the pros and cons of compensation and its effect on employee behaviors, and you will then address.
Find the adjusting entry for ABC employer at September : Ms. ABC earned a salary of $400 for the last week of September. She will be paid on October 1. The adjusting entry for ABC's employer at September
How can discrimination unify the oppressed group to resist : How can discrimination unify the oppressed group to resist such unequal treatment? How can acceptance or integration weaken the sense of solidarity
Payback period of buying the stock and holding : Calculate the payback period of buying the stock and holding onto it forever, assuming that the dividends are received as at each time
Compute depreciation for activity method : The machine is expected to produce a total of 500,000 units of product throughout its useful life. Compute depreciation for 2009 activity method
How social work administrator personal leadership philosophy : Describe an individual who might serve as an inspiration for you in a future leadership role. Explain how this example might influence you.
Identify parts of model for improving interpersonal skills : Identify the parts of the model for improving interpersonal skills. Select one of the parts, and explain the importance of the part and how it contributes.
Three major legal forms of business organisation : Discuss the three major legal forms of business organisation available to businesses together with their respective advantages

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd