Today based on discounted valuation of the future dividend

Assignment Help Financial Management

Reference no: EM131842630

Jim Cramer of CNBC recently commented that Amazon (AMZN) will start paying dividends in the near fu- ture because of all of the cash flow that it generates (coupled with a cash balance in excess of $19 billion). When pressed on the issue, Jim made a bold forecast that Amazon will start paying its first dividend 5 years from now in the amount of $34.50 per share. Jim also projected that the dividends would grow, over the following 4 years, by 12.0% per year, after which the growth rate would be a constant rate of 7.2%/year, forever. If the appropriate discount rate for Amazon's stock is 10.0%, what should the stock sell for today based on a discounted valuation of the future dividends that Jim Cramer has projected?

Reference no: EM131842630

Questions Cloud

What is the demandingness objection to consequentialism : What is the "demandingness objection" to consequentialism? Explain very briefly how this objection presents a challenge to consequentialism.

Development in the concept of human nature : What development in the concept of human nature & the place of the human being occurred during this time period?

Summarize the population of uninsured people in the us : Discuss the socioeconomic consequences of having a large uninsured population in the U.S..Summarize the population of uninsured people in the U.S.

Determining the political philosophy : What developments in political philosophy

Today based on discounted valuation of the future dividend : what should the stock sell for today based on a discounted valuation of the future dividends that Jim Cramer has projected?

Theory of deity like the christian view of deity : How is Aristotle's theory of deity like the Christian view of deity, and how is it unlike the Christian view?

Define stages of group development and team performance : Recall what you learned this week about the five stages of group development and team performance. With that in mind, respond to the following.

What are the advantages and disadvantages of new POS system : HC1041 Impact of IT on Business Assignment. Case study -- Blooming with Technology. What are the advantages and disadvantages of the new POS system

Discuss a few differences and similarities between plato : What do you think of Aristotle's idea that it is people that are moral or immoral, it is not the acts themselves that are moral or immoral?

User Account

All Pages