Using the dividend-discount model

Using the dividend-discount model

Assignment Help Microeconomics

Reference no: EM13688837

A company is paying $2 in dividends today, with a 1.1% growth rate. The U.S. Treasury bond yield is 3% (the risk free rate). At a stock price of $52, what is the equity-risk premium, using the dividend-discount model? Write the answer as a decimal, rounding to 2 decimal places.

Reference no: EM13688837

Questions Cloud

Investments in low-rated corporate bonds : A stockbroker has proposed two investments in low-rated corporate bonds paying high interest rates and selling at steep discount (junk bonds). The bonds are rated as equally risky and both maure in 15 years.

Produces output according to a production function : A firm produces output according to a production function: Q = F(K,L) = min {2K,4L}. a. How much output is produced when K = 2 and L = 3?

Stock over or under valued : Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

Using the dividend-discount model : Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

What should it do to interest rates : Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

Decide to make annual deposits in to savings account : The parents of a young child decide to make annual deposits into a college savings account. The first deposit will be made on her 5th birthday and the last deposit will be made on her 15th birthday.

Reviews

Write a Review

Required(*) Message

Microeconomics Questions & Answers

Describe the difference between the two

First, describe the difference between the two. Next, how has inflation in the U.S. compared to inflation in other countries over the last 5 years or so?

Computing output at shut down point

At a price of $24, should a perfectly competitive firm operate or shut down in a the short run if its TC is given as:

What is the equilibrium wage

What is the equilibrium wage?

Analyze effects of change in household behavior on output

Suppose households become more frugal so that there is a downward shift in the consumption function (decrease in autonomous consumption). Analyze the effects of this change in household behavior on real output, unemployment.

Economic costs and benefits for project

Economic costs and benefits for project

Compute change in total revenue which is p times q moving

please define the price elasticity of demand and give a real life example of a good with an elastic demand as well as a

Should the government set a goal of reducing marginal cost

Explain the difference between fixed-production technology and variable-production technology. Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology

Find an analytical expression for the maximum correlation

Consider a portfolio of three assets (A,B,C). Denote the expected returns on each asset as rA; rB; rC, respectively. Denote variances and covariance similarly. Suppose the investor will accept a maximum portfolio variance of X.

1 describe some healthcare situations in which an agent has

1. describe some healthcare situations in which an agent has taken advantage of a principal. now describe some

What importance does this have for price-output behavior of

in what ways if any do the demand schedules for a purely competitive firm and a pure monopolist differ? what

Complete a time-sensitive project

Rigorously analyze the issues you have identified. Base your arguments on data in the case. Demonstrate your critical thinking ability, creativity, and insight, as well as appropriate use of the tools provided in the text or in previous courses.

How do the equilibrium price and quantity change

Presume that the demand curve for wheat is, How do the equilibrium price and quantity change?

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!

Submit Assignment

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd