What do investors expect stock to sell for at end of year

Assignment Help Financial Management
Reference no: EM131063227

A share of stock is now selling for $120. It will pay a dividend of $10 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of return on the market is 18%. (Round your answer to 2 decimal places.) Expected selling price $

Reference no: EM131063227

Questions Cloud

Explain how black holes can be detected : Using information from the textbook and the internet, research black holes. Explain how black holes can be detected.
Shows the profit and loss from the strategy : A six month call with strike price of $50 costs $5. A six month put with a strike price of $40 costs $3. The current stock price is $48. A trader uses the options and stock to create a strategy that requires long 50 shares, short 100 call options, an..
What is the value of a one year european put option : A stock price is currently $50. Over each of the next two six-month periods it is expected to go up by 15% or down by 10%. The risk-free interest rate is 5% per annum with continuous compounding. What is the value of a one year European put option wi..
Why is this statement a misconception : "A black hole is a giant vacuum cleaner, sweeping up matter across wide portions of space." Why is this statement a misconception?
What do investors expect stock to sell for at end of year : A share of stock is now selling for $120. It will pay a dividend of $10 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of r..
Build a professional network of professional organizations : Building a professional network of colleagues and joining professional organizations will help you stay abreast of current happenings and research in the field.
According to the capital asset pricing model : Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 8.9%. Company $1 Discount Store Everything $5 Forecast return 16% 15% Standard deviation of returns 28% 30% Beta 1.3 1 What would be the fair return for each compa..
Determine the level of measurement for independent variables : Determine the level of measurement for each of your independent variables and the dependent variable (in terms of categorical/discrete or continuous/scale)
Different management theories : Why is it important to study the different management theories that have been developed?

Reviews

Write a Review

Financial Management Questions & Answers

  Analyzing a project with an initial cost and cash inflows

Antonio's is analyzing a project with an initial cost of $41,000 and cash inflows of $26,000 a year for 2 years. This project is an extension of the firm's current operations and thus is equally as risky as the current firm.

  The discussion board db is part of the core of online

the discussion board db is part of the core of online learning. classroom discussion in an online environment requires

  What are the dividends and earnings per share

Billy’s Exterminators, Inc., has sales of $746,000, costs of $300,000, depreciation expense of $52,000, interest expense of $36,000, a tax rate of 35 percent, and paid out $90,000 in cash dividends. The firm has 100,000 shares of common stock outstan..

  Occupancy costs-numerator of the inventory turnover

Exhibit 4.43 presents profitability ratios for Starbucks for fiscals 2010 and 2011. Using the financial statement data in Exhibits 1.26 and 1.27, compute the values of these ratios for fiscal 2012. The income tax rate is 35%. Use cost of sales, inclu..

  Compute the year-end balance of retained earnings

Eau Claire Paper Mill, Inc., had, at the beginning of the current fiscal year, April 1, 2010, retained earnings of $406,270. During the year ended March 31, 2011, the company produced net income after taxes of $642,763 and paid out 35 percent of its ..

  Expected return on the investment with a beta

The expected return on the S&P 500 is 10% and the risk-free rate is 3%. What is the expected return on the investment with a beta of (a) 0.2, (b) 0.5, and (c) 1.4?

  Determine net effect of plan on pretax profits of bimbo

The company also estimates that an additional investment in inventory of $3 million is required because of the anticipated sales increase. Determine the net effect of this plan on the pretax profits of Bimbo.

  What was the annual increase in selling price

In January 2007, the average price of an asset was $28,658. 7 years earlier, the average price was $20,808. What was the annual increase in selling price? In percentage form

  What is the net income under the worst case scenario

Miller Mfg. is analyzing a proposed project. The company expects to sell 12,000 units, plus or minus 3 percent. The expected variable cost per unit is $8.00 and the expected fixed cost is $35,000. The fixed and variable cost estimates are considered ..

  Holding tomorrow after the public release of information

Let us say that you are in a country where insider trading is not illegal. You are among a handful of people who knows that company AAA is going to announce earnings tomorrow that will be higher than expected. Consequently you take a large long posit..

  What is the least you could pay to acquire a bond

A Treasury issue is quoted at 117:03 bid and 117:17 ask. Assume a face value of $1,000. What is the least you could pay to acquire a bond?

  Interest rates have increased since bond k was issued

Multiple Choice: Bond K is selling at par with a 5% coupon. Bond L is selling for $1,030. Bond M is selling for $960 and has a YTM of 5.5%. Bonds K, L, and M are of similar quality and all mature in 6 years. Bonds K and L are noncallable, but Bond M ..

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