What is annual growth rate of stock dividend expected

Assignment Help Financial Management
Reference no: EM132010272

Court has one share of stock and one bond. The total value of the two securities is 1,054 dollars. The bond has a YTM of 9.56 percent, a coupon rate of 6.51 percent, and a face value of 1,000 dollars. The bond matures in 5 years and pays annual coupons with the next one expected in 1 year. The stock is expected to pay an annual dividend every year forever, the next dividend is expected to be 11.48 dollars in 1 year, all subsequent dividends are expected to grow at the same annual growth rate, and the expected return for the stock is 10.23 percent. What is the annual growth rate of the stock’s dividend expected to be? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM132010272

Questions Cloud

Stock is expected to pay dividend every year : What is price of stock expected to be in 4 years if the stock is expected to pay dividend every year forever, the expected return for stock is 10.28% per year
Calculate the payoff at expiration for call holder : Calculate the payoff at expiration for a call holder on an option on a Eurodollar future,
What is price of violet sky shipping stock expected : What is the price of Violet Sky Shipping stock expected to be in 4 years if its annual dividend is expected to grow by 4.38 percent per year forever
Expected return for litchfield design stock : If the expected return for Litchfield Design stock is 17.52 percent; the dividend is expected to be 2.9 dollars in 1 year(s),
What is annual growth rate of stock dividend expected : Court has one share of stock and one bond. What is the annual growth rate of the stock’s dividend expected to be?
Harris owns one share of stock of fairfax paint : Harris owns one share of stock of Fairfax Paint and one share of stock of Litchfield Design.
Share of stock of platinum water packaging : Goran owns one share of stock of Platinum Water Packaging and one share of stock of White Mountain Consulting.
What is the dividend expected to be in nine years : Oxygen Optimization stock is currently priced at 43.18 dollars per share. What is the dividend expected to be in 9 years?
What growth rate is expected for litchfield design dividends : Kwame owns one share of stock of Fairfax Paint and one share of stock of Litchfield Design. What growth rate is expected for Litchfield Design dividends?

Reviews

Write a Review

Financial Management Questions & Answers

  Correlation coefficient between stock-index mutual fund

What is the most likely correlation coefficient between a stock-index mutual fund and the S&P 500?

  How much of this payment represents interest

Assuming payments are made at the end of each year, what is the annual payment required to retire a $50,000 loan with a term of 5 years and an interest rate of 10%; how much of this payment represents interest at the end of year 1?

  Find the future value of these cash flows

Phosfranc Inc., is expecting the following cash flows starting at the end of the year—$133,245, $152,709, $161,554, and $200,760. If their opportunity cost is 9.4 percent, find the future value of these cash flows.

  Compare consumer lending to commercial lending

Compare consumer lending to commercial lending. How are the similar? How are the different? Explain how the five questions (character, how much, what for, source of repayment and secondary source) can be applied to consumer lending. How would you rec..

  What would the nominal annual rate on the loan be

A firm has decided to borrow $500,000 on a 10% add-on basis, payable in 6 end-of-month installments. What would the nominal annual rate on the loan be?

  The company market value to increase

In which occasion, can you expect the company’s market value to increase?

  Create and post a project plan

Create and post a project plan that describes how you will complete a full draft of your literature review in the time available.

  About process cost accounting systems

Which of the following statements about process cost accounting systems is false?

  Current carrying costs-calculate the economic order quantity

Louise Manufacturing uses 1,700 switch assemblies per week and then reorders another 1,700. The relevant carrying cost per switch assembly is $6.00, and the fixed order cost is $850. What are the current carrying costs?  Calculate the economic order ..

  Calculate the net present value of one regular customer

At Dive Shop Inc, regular customers place about 4.5 orders per year. Calculate the net present value of 1 regular customer at Dive Shop. Rounding: penny.

  Liability according to four part scope of employment test

Is Harold civilly and criminally liable for child molestation? Explain. Determine liability according to the 4-part scope of employment test?

  What is the future value of this prize

The Florida lottery agrees to pay the winner 256,000 at the end o each year for 20 years. What is the future value of this prize if each payment is put in a account earning0.10

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