What is current value of stock

Assignment Help Financial Management

Reference no: EM131911655

1. If you have a portfolio with a beta of .6, when the market return increases by 20%, the portfolio return is expect to:

A. Decrease by 6%

B. Increase by 6%

C. Increase by 12%

D. Increase by 19.4%

2. Outback Corporation paid a dividend of $2 per share over the last 12 months. The dividend is expected to grow at a rate of 30 percent over the next three years (supernormal growth). It will then grow at a normal, constant rate of 5 percent for the foreseeable future. The required rate of return is 10 percent (this will also serve as the discount rate). What is the current value of the stock? (This answer represents the present value of the first three periods of dividends from a previous question plus the present value of the price of the stock after three periods.)

a. $77.69

b. $52.36

c. $63.54

d. $75.81

Reference no: EM131911655

Questions Cloud

Calculate the initial outlay associated with the project : Calculate the initial outlay associated with the project. What is the terminal cash flow in year 10?

Compute after-tax rate of return for truck : The combined federal and state income tax rate for BVM is 40%. Compute the after-tax rate of return for the truck.

What is total value of your state bank of utah assets : What is total value of YSBU’s assets (do not take expected profits into account when computing assets’ value)? What is the total value of YSBU’s liabilities)

The residual dividend theory suggests that dividends : The residual dividend theory suggests that dividends will only be paid. Investors who hold gold and other precious metals in their portfolios generally.

What is current value of stock : The required rate of return is 10 percent (this will also serve as the discount rate). What is the current value of the stock?

What is the growth rate of dividends : A company had net income of $20,000 this year on equity of $100,000 last year. What is the growth rate of earnings? What is the growth rate of dividends?

Discuss the importance of the pecking order theory : Discuss the importance of the “pecking order” theory for managing the capital structure of a company,

Journalize the entry to record the payroll for week : Journalize the entry to record the payroll for the week.

Offer no retirement solutions to their employees : What are the factors influencing a company's decision which type of plan to offer or to offer no retirement solutions to their employees???

User Account

All Pages