The dividends are expected to grow

Assignment Help Financial Management

Reference no: EM131047526

A7X Corp. just paid a dividend of $2.80 per share. The dividends are expected to grow at 20 percent for the next eight years and then level off to a growth rate of 5 percent indefinitely. If the required return is 13 percent, what is the price of the stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $

Reference no: EM131047526

Questions Cloud

Best estimate of the stocks current market value : Acme Corporation just paid a dividend of D 1 = $1.72. Analysts expect the company's dividend to grow by 10% between year 1 and 2, and at a constant rate of 5% from year 2 to 3 and continue with the 5% thereafter. The required return on this low-risk ..

Straight-line to zero over the projects five-year life : Consider a project to supply 100 million postage stamps per year to the USPS for the next five years. You have an idle parcel of land available that cost $850,000 five years ago; if the land were sold today it would net you $1,080,000 after-tax. The ..

What is the yield on ten year bond : Drongo Corporation's 4-year bonds yield 5.95%. The real risk-free rate is 2.29%. The maturity risk premium is estimated to be 0.08%(t-1), where t is equal to the time to maturity. The default and liquidity premiums for Drongo's bonds total 0.66% and ..

What is target stock price in one year-shares of stock : Fly Away, Inc., has balance sheet equity of $5.1 million. At the same time, the income statement shows net income of $724,200. The company paid dividends of $416,415 and has 150,000 shares of stock outstanding. If the benchmark PE ratio is 20, what i..

The dividends are expected to grow : A7X Corp. just paid a dividend of $2.80 per share. The dividends are expected to grow at 20 percent for the next eight years and then level off to a growth rate of 5 percent indefinitely. If the required return is 13 percent, what is the price of the..

Dividends are expected to grow at constant rate : The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.35 per share on its stock. The dividends are expected to grow at a constant rate of 3 percent per year indefinitely. Investors require a return of 10 percent on the company's stock. What ..

What stock price would you consider appropriate : The Perfect Rose Co. has earnings of $2.05 per share. The benchmark PE for the company is 11. What stock price would you consider appropriate? Stock price $ What if the benchmark PE were 14? (Do not round intermediate calculations and round your answ..

Percentage change in price of bond : Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has two years to maturity, whereas Bond Dave has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the perce..

Affect the value of a foreign currency : Given the factors that affect the value of a foreign currency, describe the type of economic or other conditions in Mexico that could cause the Mexican peso to weaken, and therefore to adversely affect your business.

User Account

All Pages