Require a return-what is the current share price

Assignment Help Financial Management
Reference no: EM13730358

Great Pumpkin Farms just paid a dividend of $3.40 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for the next three years, and a return of 9 percent thereafter. What is the current share price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Reference no: EM13730358

Questions Cloud

Minimum and maximum purchase prices for target company : Acquiring Company is considering buying target Company. Target Company is a small biotechnology firm that develops products licensed to the major pharmaceutical firms. Development costs are expected to generate negative cash flows during the first tw..
Type of corporate restructuring-fits with common theories : Identify the type of corporate restructuring that fits with common theories of what are assumed to be causes of mergers and acquisitions.
What would your equal monthly payments be : Your uncle will sell you his bicycle shop for $240,000, with "seller financing," at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (ba..
Evenly divided between capital gains and dividend yield : Suppose you know that a company’s stock currently sells for $58 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield.
Require a return-what is the current share price : Great Pumpkin Farms just paid a dividend of $3.40 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for ..
What is the future value of twenty monthly deposits : What is the future value of twenty monthly deposits that start at $35 but then increase by 5% a month in an account that earns 5% per month?
Required return must investors be demanding on storico stock : Storico Co. just paid a dividend of $1.90 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent divid..
What is the projected dividend for the coming year : Frey Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 7 percent per year indefinitely. The required return on this stock is 12 percent,..
Buy a seat if the company uses straight voting : After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only person voting for you. If Schenkel has 390,000 shares out..

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the annual amount of the instalment loan payment

The company you work for is planning to borrow $58000 at an effective interest rate of 15% per year. The company expects to repay the loan with six equal annual payments at the end of each year, beginning one year after the loan is received. Compute ..

  Firm currently has equity with a market value

A firm currently has equity with a market value of $600,000,000 and debt with a market value of $500,000,000. The firm has 10,000,000 shares outstanding. The bonds offer investors a return of 8%. The firm is contemplating issuing $300,000,000 in new ..

  Stream of cash flow to be received at the end

What is the present value of the following stream of cash flow to be received at the end of each year assuming a discount rate of 20%? What is the future value at the end of year 3 assuming an annual interest rate of 20%?

  Understanding supply chain and how the consumer can play a

understanding supply chain and how the consumer can play a critical role in the supply chain is an important part of

  Use of a machine for production purposes in his business

A commercial client is seeking use of a machine for production purposes in his business. Suggest which products might be useful to them, and how they are consistent with the aims of Islamic banking?

  Write a 750- to 1050-word paper in which you describe a

write a 750- to 1050-word paper in which you describe a project you have managed personally or professionally. examples

  About the retirement plan

You are considering your retirement, and would like to have accumulated $1,839,829 by the time you retire in 27 years. If you anticipate that your average compounded rate of return over the 27 years until retirement will be 12%, how much will you nee..

  Rogues operating income is equal

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; an..

  What is the annual ordering cost of post card inventory

Post card depot, a large detailer of post cards orders 7,664,874 post cards per year from its manufacturer. Post card depot plans on ordering post cards 12 times over the next year. Post card depot receives the same number of post cards each time it ..

  Differing line of business use different costs of capital

Jenkins Security has learned that a rival has offered to supply a parking garage with security of ten years for $40,000 up front and a further $20,000 per year.  Different division with differing line of business use different costs of capital becaus..

  Compute the prospective rate of return before taxes

A project has an initial cost of $150,000 and an estimated salvage value after 13 years of $90,000. Estimated average annual receipts are $27,000. Estimated average annual disbursements are $16,000. Assuming that annual receipts and disbursements wil..

  Find an existing budget from a published source

Using the existing budget, create a new budget for the next fiscal year. Set out the details of all the assumptions you needed in order to build this budget.

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