Required return on microtech

Assignment Help Business Management

Reference no: EM13971160

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $0.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 17% per year - during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return on Microtech is 16%, what is the value of the stock today? Round your answer to the nearest cent.

Reference no: EM13971160

Questions Cloud

Keeping the cost to the organization : Provide your recommendations to Ms. Martin on how to address each of these items in the policy to provide the employees with the best benefit, while keeping the cost to the organization at a minimum. Please explain your reasoning.

Examine and evaluate window host software firewall : Examine and evaluate Window's 7 host software firewall and one other operating system host firewall (other than Linux). Select the one that you feel is superior. Provide rationale for your response

Problem regarding the lock-box arrangement : The hospital is exploring a lock-box arrangement will promises to cut the six days to one day. If these funds released by the lock-box arrangement can be invested at 8%, what will the annual savings be? Assume the bank fee will be $2,000 per month..

Show the value of the firm eps and rate of return : Show the value of the firm, EPS, and rate of return on the stock before and after the proposed restructuring. What changed?

Required return on microtech : The dividend should grow rapidly - at a rate of 17% per year - during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return on Microtech is 16%, what is the value of the stock today? Round your answer to ..

Determine ratio between the shortest and the longest rays : Modal dispersion in a fiber occurs because propagating rays travel different distances in arriving at the output. Consider the rays travelling in the fiber (see figure below) from A to B at two different paths: determine the ratio between the shor..

How would you characterize the moral issues in given case : How would you characterize the moral issues in the RIAA vs. Verizon case? Aside from the legal requirements, is there any moral obligation on the part of Verizon to present the identity of these file swappers to the RIAA

Explain the relationship between morality and ethics : In readings and class discussions we have talked about the relationship and distinctions between morality and ethics. Morality deals with basic principles of right and wrong or good and bad. Ethics deals with behavior and actions.

Planning process for a firm : You are involved in the planning process for a firm that is expected to have a large increase in sales for the next year. Which type of firm would benefit the most from that sales increase:

User Account

All Pages