Required return-what is the value of the stock

Assignment Help Financial Management

Reference no: EM131060416

Could I Industries just paid a dividend of $1.30 per share. The dividends are expected to grow at a 15 percent rate for the next 5 years and then level off to a 6 percent growth rate indefinitely. If the required return is 12 percent, what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price $

Reference no: EM131060416

Questions Cloud

How much money can he afford to borrow : karl can afford car payments of $235 a month for ... Question Karl can afford car payments of $235 a month for 48 months. The bank will lend him money to buy a car at 7.75 percent interest. How much money can he afford to borrow?

What was the most recent dividend per share paid on stock : Feeback Corporation stock currently sells for $51 per share. The market requires a return of 8.2 percent on the firm’s stock. If the company maintains a constant 2.1 percent growth rate in dividends, what was the most recent dividend per share paid o..

What is the financial break-even point : Miller Tools is considering a new project that requires an initial investment of $82,600 for fixed assets, which will be depreciated straight-line to zero over the project's 4-year life. The project is expected to have fixed costs of $41,200 a year a..

What is the operating cash flow at this level of output : This project has a contribution margin of $4.50, projected fixed costs of $12,500, projected variable cost per unit of $12, and a projected financial break-even point of 5,750 units. The depreciation expense is $6,200 and the tax rate is 34 percent. ..

Required return-what is the value of the stock : Could I Industries just paid a dividend of $1.30 per share. The dividends are expected to grow at a 15 percent rate for the next 5 years and then level off to a 6 percent growth rate indefinitely. If the required return is 12 percent, what is the val..

What is the implied repo rate : Today’s price of a 3-month t-bill futures is 958500. Today, the spot price of a 6-month t-bill is $940000. What is the implied repo rate? In addition to the information in the above assume a trader can actually borrow at a repo rate of 6% p.a. Show h..

For firm with constant payout ratio : For a firm with a constant payout ratio, the dividend growth rate can be estimated as: Return on equity × (1 + Retention ratio). Payout ratio × Return on assets. Return on retained earnings × Retention ratio. Return on assets × Retention ratio. Payou..

Calculate operating cash flow using different approaches : A proposed new project has projected sales of $135,000, costs of $69,000, and depreciation of $13,800. The tax rate is 30 percent. Calculate operating cash flow using the four different approaches.

Weaknesses of the payback method : All of the following are weaknesses of the payback method except:

User Account

All Pages