Price of the stock after the announcement

Assignment Help Finance Basics
Reference no: EM132347838

The stock of Robotic Atlanta Inc. is trading at $ 28.13 per share. In the past, the firm has paid a constant dividend (i.e., g = 0) of $ 4.92 per share and it has just paid an annual dividend (i.e., D0 = 4.92 ). However, the company will announce today new investments that the market did not know about. It is expected that with these new investments, the dividends will grow at 8.6 % forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? (Round your answer to 2 decimal places and record your answer without dollar sign or commas).

Reference no: EM132347838

Questions Cloud

Describe potential best practice for company in given stages : Write a one page paper in which you describe a potential best practice for a company in Stage I, II, or III that is not discussed in the text.
Operating receipts-operating cash flow : Among the following different flows, which will be appropriated by both shareholders and lenders: operating receipts, operating cash flow, free cash flows?
Production costs and the corresponding drop in profits : Why can a direct link not be drawn between an increase in production costs and the corresponding drop in profits?
Capital-employed analysis of the balance sheet : When do we use a capital-employed analysis of the balance sheet? And when do we use a solvency-and-liquidity analysis of the balance sheet?
Price of the stock after the announcement : Assuming that the discount rate remains the same, what will be the price of the stock after the announcement?
Is political jockeying an appropriate method in government : Is political jockeying an appropriate method in government? Should it be present in the development of state budgets, executive activity, or legislative.
Conduct thermodynamic analysis of the Solar Turbines Mercury : MEEN 315 Principles of Thermodynamics Assignment - Project Task, Texas A&M University, USA. Conduct thermodynamic analysis of the Solar Turbines Mercury
What is the price of the stock : The appropriate discount rate for Pharsalus's stock is 14.6 percent. What is the price of the stock?
Yield to maturity on the bond : Compute the price of a $ 8,602 par value, 17 percent coupon consol, or perpetual bond (i.e., coupon interest payment is a perpetuity)

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