Required rate of return on the stock

Assignment Help Financial Management

Reference no: EM13945124

GoFit Training Inc just paid an annual year-end dividend of $1.60 per share. It plans to increase the dividend by 7% next year, and increase it by the same percentage for the future. If the required rate of return on the stock is 8%, what is the value of GoFit's stock (to the penny)? Formula: Next Div/ (Req Rate - Growth Rate)

Reference no: EM13945124

Questions Cloud

Prepaid insurance : What is prepaid insurance what do you have to do after journalizing

What will the aftertax salvage value be : Farris Industrial purchased a machine five years ago at a cost of $164,900. The machine is being depreciated using the straight-line method over eight years. The tax rate is 35 percent and the discount rate is 14 percent. If the machine is sold today..

The weight at birth of males has a mean value : The weight at birth of males has a mean value of 3.53 kg with a standard deviation of 0.58. What birth weight has a z-score of 0.81? Round to the nearest hundredth as needed.

Retirement account at interest compounded annually : You deposit $2,500 today in a retirement account at 6% interest compounded annually. How much more money will you have if you leave it in a for 35 years rather than 25 years?

Required rate of return on the stock : GoFit Training Inc just paid an annual year-end dividend of $1.60 per share. It plans to increase the dividend by 7% next year, and increase it by the same percentage for the future. If the required rate of return on the stock is 8%, what is the valu..

Director of marketing for a company manufacturing laundry : The director of marketing for a company manufacturing laundry detergent conducts an experiment to compare satisfaction with the laundry detergent product based on level of temperature used for the wash. A random sample of 500 individuals

Terms of the present value of those cash flows : You have determined the profitability of a planned project by finding the present value of all the cash flows from that project. Which of the following would cause the project to look more appealing in terms of the present value of those cash flows?

Discount rate should the firm apply to project cash flows : Deep Mines has 14 million shares of common stock outstanding with a beta of 1.15 and a market price of $42 a share. There are 900,000 shares of 9 percent preferred stock outstanding valued at $80 a share. What discount rate should the firm apply to a..

The company increases advertising expenditures : The sales manager believes the company could increase sales by 3,000 units if advertising expenditures are increased by $30,000. Determine the effect on income if the company increases advertising expenditures.

User Account

All Pages