Supernormal and negative growth

Assignment Help Finance Basics

Reference no: EM1366530

1. Supernormal Growth. Finley Corporation is increasing quickly. Dividends are expected to increase at 25% rate for the next three years, with a growth rate falling off to a constant 6% thereafter. If the required rate of return is 14 percent and the company just paid a $2.50 dividend, what is the current share price?

2. Negative Growth. Antiques 'R'Us is a mature manufacturiing firm. The company just paid a $10. dividend, but management expects to reduce the payout by 10% per year, indefinitely. If you require a 13 percent return on this stock, what will you pay for a share today?

3. Finding the Dividend. Tubby Corporation stock currently sells for $72 per share. The market requires a 14 percent return on the firm's stock. If the company maintains a constant 6 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?

Reference no: EM1366530

Questions Cloud

Explanation on self evaluations : Provide the high volume of reviews a manager may need to complete annually, many managers ask their employees to do a self evaluation.

Computing portfolio expected return and standard deviation : An investor has a $10,000 portfolio that allocated as given: short 100 shares of stock A, purchase 250 shares of B and 200 shares of 3. Any additional funds are lent at risk free rate of 0.04.

Managers ability to function as a contingency leader : How would a manager know which variables in a given situation should influence which approach to leadership he or she should take? Identify a personality trait that you think would help a manager function as a contingency leader.

Current regulations and oversights : The current regulations and oversights that exist in the United States today.

Supernormal and negative growth : Finley Corporation is increasing quickly. Dividends are expected to increase at 25% rate for the next three years, with a growth rate falling off to a constant 6% thereafter

Accomplishing a new or non-routine task : Think about a time when you were required to accomplish a new or non-routine task at work that had the potential to cause injury or illness.

Show the annotated bibliography : identify four components that must be in each annotated bibliography what would they be

Effect of market shocks on equilibrium quantity and price : Briefly discuss whether this problem provides enough information to determine whether the equilibrium price and quantity of trucks increased or decreased.

Performance of healthcare organizations : Four "big ideas" which represent great opportunities to enhance the performance of healthcare organizations are Total Quality management, Customer Relationship management, the internet and teh virtual teaming.

User Account

All Pages