Suppose if the discount rate for the stock

Assignment Help Macroeconomics
Reference no: EM1333405

Stock valuation

Microsoft Inc. paid $2 dividend last week. You expect the dividend to grow steadily at a rate of 5 percent per year. If the discount rate for the stock is 12 percent, at what price will the stock sell?

 

Reference no: EM1333405

Questions Cloud

Illustrate what are the dividend payout ratios for each firm : Illustrate what are the dividend payout ratios for each firm. What are the expected dividend growth rates for each firm.
Determining the deductible interest : Ted incurs $2,100 interest on his automobile loan, $120 interest on the loan to purchase the computer for personal use, $630 interest on credit cards, and $1,100 investment interest expense.
Illustrate what sources of information were researched : Illustrate what sources of information were researched and utilized. What economic measures are commonly used in discussions of the health of the economy.
A large diversified organization sets strategy : Consider how a large diversified organization sets strategy. PepsiCo, for example, has beverages. Explain your answer.
Suppose if the discount rate for the stock : Suppose if the discount rate for the stock is 12 percent, at what price will the stock sell.
Explaining fixed pie concept : How could the fixed pie concept come into play in this situation?
Discuss the special risks faced by workers : Discuss the special risks faced by workers in the 21st century.
Computing value of covered interest arbitrage : Assume the current spot rate is C$1.1875 and the one-year forward rate is C$1.1724. The nominal risk-free rate in Canada is 4 percent while it is 3 percent in the U.S.
Suppose ke the required rate of return : Suppose Ke, the required rate of return, goes up to 12 percent; what will be the new value of Po?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

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