Projected to grow at constant rate

Assignment Help Financial Management

Reference no: EM13870864

Burklin, Inc., has earnings of $19.5 million and is projected to grow at a constant rate of 6 percent forever because of the benefits gained from the learning curve. Currently, all earnings are paid out as dividends. The company plans to launch a new project two years from now that would be completely internally funded and require 35 percent of the earnings that year. The project would start generating revenues one year after the launch of the project and the earnings from the new project in any year are estimated to be constant at $8.0 million. The company has 9.00 million shares of stock outstanding.

Estimate the value of the stock. The discount rate is 12 percent

Reference no: EM13870864

Questions Cloud

How much are liabilities : If assets are $ 40,000 and stockholders’ equity is $ 10,000, how much are liabilities?

Published code of ethics : Review the published Code of Ethics for each of the following major engineering professional organizations:

Cash for each level of desired dividend income level : Creating own dividend policy. Erik owns 2,000,000 shares of Wiseguy Entertainment. Wiseguy just declared a cash dividend of $0.05 per share. The stock is currently selling for $5.00. If Erik wants an annual “dividend income” of $50,000, $100,000, or ..

How relevant is political metaphor in the energy industry : What are the differences between business and governments as management systems? How relevant is the political metaphor in the energy industry?

Projected to grow at constant rate : Burklin, Inc., has earnings of $19.5 million and is projected to grow at a constant rate of 6 percent forever because of the benefits gained from the learning curve. Currently, all earnings are paid out as dividends. Estimate the value of the stock.

Assignment on constructive dividends redemptions : Constructive Dividends, Redemptions, and Related Party Losses

Derive a relationship between time t and the velocity v : ii. Derive a relationship between time t and the velocity V. iii. Derive a relationship between displacement D and the velocity V.

Which innovations in particular marked the transformation : Which innovations in particular marked the transformation into a global player? What are the most critical barriers for continuous high growth in the future for Vestas?

Research project related to the environment in uae : Its a research project related to the Environment in UAE, Paper recycling - Describe the techniques you plan to use to analyse the data you collect.

User Account

All Pages