Value particular stock that is expected to pay the dividend

Assignment Help Financial Management
Reference no: EM131942974

1. John is evaluating a stock that he believes will pay a dividend equal to $1.85 in exactly one year from today. Further, John expects that in addition to the dividend he will be able to sell the stock for the amount $49 per share also one year from today. Using this information, what is the stock's price today if the required rate of return on the stock is 13.00%?

2. John is looking to value a particular stock that is expected to pay the dividend of $1.80 at the end of each year for at least the next few years. John expects to to be able to sell the stock at the end of year two, just after he receives the dividend in that year, for $71 per share. Given this information, what is the estimate of the stock's price today if the required rate of return is 16.00%.

Reference no: EM131942974

Questions Cloud

Wireless communication continue to dominate the market : Some of the traditional telecommunication companies poised at a comeback or will wireless communication continue to dominate the market?
What is the primary source for finding federal grants : What is the primary source for finding federal grants? and why?
Concepts for accomplishing personal grants plan : What are two (2) most valuable concepts for accomplishing personal grants plan over the 10 years?
What is your estimate of the value of nike stock : Nike had sales of $20 billion in 2016. what is your estimate of the value of Nike’s stock in early 2017?
Value particular stock that is expected to pay the dividend : John is looking to value a particular stock that is expected to pay the dividend of $1.80 at the end of each year for at least the next few years.
What are five fiscal concepts and principals used in budgets : What are the 5 budget concepts and principles. What are the five fiscal concepts and principals used in budgets?
Adjusted for inflation the exchange rate : What does he mean when he says that adjusted for inflation the exchange rate is not low but high relative to historical standards?
New production line is to overhaul existing line : The alternative to investing in the new production line is to overhaul the existing line, Should ACME replace or renovate the existing line?
Should asma specialist purchase or lease the equipment : If the present value of the term loan used to purchase the machine is $294,260; should Asma Specialist purchase or lease the equipment?

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the payments and loan balances

ssume that a lender offers a 30-year, $150,000 adjustable rate mortgage (ARM) with the terms:- Compute the payments, loan balances, and yield for the ARM for the five-year period.

  You make last of your thirty investments

how much will you have on the day that you make the last of your thirty investments?

  What is its current stock price

X Inc. has the following expected dividends: $1 in one year, $1.15 in two years, and $1.25 in three years. After, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.25 and so on). If X Inc.'s ..

  Given that an organizations supply expenses

Given that an organization's supply expenses are $2,050,000 and it total operating revenue is $7,700,000, what is the supply expense to total operating revenue ratio: If a project's fixed costs are $50,000, the project calls for pricing the service a..

  Chris is considering buying a property

Chris is considering buying a property that will generate a monthly net cash flow of $550 for the next 15 years.

  The issue of risk and the manipulation of revenues

what are vitiating factors? to what extent can vitiating factors affect the validity of an otherwise valid and enforceable contract. Expound on the issue of risk and the manipulation of revenues and expenses which apply to ROE.

  How much would investment be worth after three months

The treasurer of a major U.S. firm has $24 million to invest for three months. how much would the investment be worth after three months?

  Explain how a swaption can be terminated at expiration

Explain how a swaption can be terminated at expiration by either exercising it or settling it in cash. Why are these procedures financially equivalent?

  Manufacture to maximize the total profit contribution

How many units of each model should it manufacture to maximize the total profit contribution?

  Upgrade to their current call-waiting equipment

Crackle and Pop Telephone Company is considering an upgrade to their current call-waiting equipment. Their existing hardware was purchased 3 years ago for $150,000, has been depreciated straight line over a 5-year useful life (so, two years of deprec..

  Expansion project that requires an initial fixed asset

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 million

  Calculating key stock performance metrics

Calculating key stock performance metrics The Morton Company recently reported net profits after taxes of $16.4 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $2 million a year.

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