Predicted price of the company

Assignment Help Finance Basics
Reference no: EM131055613

Figure out a price that it can sell at. you believe that the company will pay its first dividend in 8 years.a t that point it will pay a dividend of 1.80, which it will then increase at 6.5% each year. you think that the appropriate discount rate for the company is 9.5%

a) Based on your analysis, what is the predicted price of the company today?

b) You suggest a price of 24 for company. Given this price, what is the project return on the first day of trading,assuming that market participants share your views and price the stock equal the predicted price from a?

c) What do you expect the stock price to be n seven years (one year before the first dividend payment)? in fact, the stock price equals to 45, at what rate r would this be the correct price (assuming nothing else has changed, so that the first dividend is still expected to be 1.80)?

Reference no: EM131055613

Questions Cloud

Research on branding- impact of branding in sales : I have selected for this research assignment is marketing and the assignment topic is Branding- impact of branding in sales or organisational development and research should be done on fast food business like mc donalds, hungry jacks, kfc etc
How to operate the sony digital hd video camera : The following will be used to assist the individual(s) that are going to operate the Sony Digital HD Video Camera model number HVR-Z7R/Z7N.
Identify two advantages and two disadvantages to using ratio : Using the Ashford University Library as a resource, find two articles that discuss financial ratio analysis. Identify two advantages and two disadvantages to using ratios in financial analysis. Be sure to cite your sources using APA format as outl..
Write a paper about the role of media in covering the war : Write a paper about The role of media in covering the war. Discuss the economic, political, and social characteristics connected to your specific topic.
Predicted price of the company : a) Based on your analysis, what is the predicted price of the company today? b) You suggest a price of 24 for company. Given this price, what is the project return on the first day of trading,assuming that market participants share your views and ..
Short term treasury securities : A bank has $1 million in vault cash, $5 million in short term Treasury securities and $20 million in deposits at a Federal Reserve Bank. Identify the term or concept that fits each description. The interest rate the Fed charges banks for short term l..
What growth rate is expected for the companys stock price : The stock price of Tomboy, Inc. is $58.78. Investors require a 8.6 percent rate of return on similar stocks. If the company plans to pay a dividend of $3.14 next year, what growth rate is expected for the company’s stock price?
Calculate the yield to maturity : a. Calculate the yield to maturity (YTM) on this bond. b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.
What is the beta of the company : The capital structure is 75% debt and 25% internal equity. Before tax cost of debt is 15% and tax rate is 20%. Risk free rate is 6% and market risk premium is 8%. What is the beta of the company?

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!

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