Stock value and dividend initiation-compute current value

Assignment Help Financial Management
Reference no: EM131350525

Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.95 per share in 2 years. This dividend will grow at 13 percent indefinitely. Using a 15 percent discount rate, compute the current value of this stock.

Reference no: EM131350525

Questions Cloud

What is the most money you can make on the position : The common stock of the BDF Corporation has been trading in a narrow range around $100 per share for months, and you believe it is going to stay in that range for the next month. What options strategy, using both put and call options, could you use t..
Deposit with no outstanding checks or uncleared deposits : You have $49,762 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $11,618 and then deposit a check for $7,880. What is your net float?
What is the total rate of return on the bond : Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity. Find the bond's price today and 6 months from now after the next ..
Compute the current value : Compute the current value An enterprise buget for soybeans shows a yield of 46 bushels, a selling price of $11.80 per bushel, and total cost of $460.20 per acre. What is the break-even yield?
Stock value and dividend initiation-compute current value : Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.95 per share in 2 years. This dividend will grow at 13 percent indefinitely. Using a 15 percent discount rate, compute the current valu..
Write a summary of your communication quiz score : Write a summary of your communication quiz score, describing your strengths and weaknesses and how you plan to develop your communication skill set. Additionally, what aspects of communication that were not covered by the quiz do you think are im..
Why you believe the action is required for the citations : Based on the Citation and Notification of Penalty letter you received in Unit III, prepare a document that summarizes at least five actions you would take as soon as possible after you reviewed the letter. For each of the actions, you must state ..
What are key words and how do they help with searches : What are "key words" and how do they help with searches? What key words did you use for your searches? What are "search limiters" and how do they help with searches? What search limiters did you use for your searches?
Percentage with one decimal place : Express as a percentage with one decimal place. Do not include the percent sign. If your calculator says 0.7543, you would answer 75.4.

Reviews

Write a Review

Financial Management Questions & Answers

  Start their savings plan for the big event

Bob and Carol are planning for the birth of their first child exactly four years from today. They are now ready to start their savings plan for the big event. The current hospital cost for having a healthy baby at the local hospital is $6500 after al..

  Preparing a vacation to Europe in the future

You are preparing a vacation to Europe in the future. You plan to save $400 a month beginning today, and estimate you earn 1% per month on your savings. Your goal is to save $5,000. How long it take to save this amount?

  What should be the price of this bond

Duke Energy has recently issued a bond with the following characteristics: maturity: 20 years, coupon rate: 8% (paid semi-annually), face value: $1000. Your investment advisor has told you that the yield-to-maturity on this bond is 7%. What should be..

  Reasons people lease vehicles

Which of the following are reasons people lease vehicles?

  Share initial margin requirement

You open a brokerage account on January 1 and sell short 500 shares of Apple Computer at $163.39 per share. The initial margin requirement is 50%. Assume that Apple pays an annual dividend on December 31 of $5.50 per share. What is the margin balance..

  What is role of a market maker in the purchase of stock

Explain the difference between the NYSE, NASDAQ and the O.T.C. In your answer explain which market is organized and unorganized? What is the role of a “market maker” in the purchase of stock?

  Assume continuously compounded interest at rate r

Assume continuously compounded interest at rate r. You plan to borrow 1,000 today, 2,000 one year from today, 3,000 two years from today, and then pay off all these loans three years from today. How much will you have to pay?

  Compute the EAC for both machines

You are evaluating two different silicon wafer milling machines. The Techron I costs $213,000, has a three-year life, and has pretax operating costs of $54,000 per year. The Techron II costs $375,000, has a five-year life, and has pretax operating co..

  What is the approximate future value compounded monthly

What is the approximate future value compounded monthly, of a current investment of $28,000 at an annual interest rate of 3.5% for the next 20 years?

  Identify the types of revenue earned by waste management

Identify the types of revenue earned (a brief description will do) by Waste Management. Do you believe that any of the different types of revenue earned by Waste Management might be subject to significantly differing levels of inherent risk? Why or w..

  What is the internal rate of return if the initial cost

Miller Brothers is considering a project that will produce cash inflows of $32,500, $38,470, $40,805, and $41,268 a year for the next four years, respectively. What is the internal rate of return if the initial cost of the project is $184,600?

  The inverse of a spread is called reverse spread

An investor believes that there will be a big jump in a stock price, but is uncertain as to the direction. Identify six different strategies (spreads or combinations) the investor can follow and explain the differences among them. You should also con..

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