What is its current value

Assignment Help Financial Management
Reference no: EM131450896

A firm recently paid a $0.50 annual dividend. The dividend is expected to increase by 11 percent in each of the next four years. In the fourth year, the stock price is expected to be $24. If the required return for this stock is 14.5 percent, what is its current value? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Current value $

Reference no: EM131450896

Questions Cloud

Weights used in the calculation of betterpies wacc : What would be the weights used in the calculation of BetterPie’s WACC?
Describe your profit making arbitrage strategy : You are a manager of Short Term Capital Management (STCM). describe your profit making arbitrage strategy.
Calculate the value of kendras operations : Value of Operations Kendra Enterprises has never paid a dividend. Calculate the value of Kendra's operations.
Viewpoint of effectiveness and efficiency : Compare John and Mary from the viewpoint of effectiveness and efficiency.
What is its current value : A firm recently paid a $0.50 annual dividend. what is its current value?
Project is to be financed entirely from external sources : Advanced Technology Inc. has $600 of debt and $200 of equity (market values). Project is to be financed entirely from external sources (by raising new debt or e
What is the ask quote for yen in terms of euros : Suppose the spot quotes for the Japanese yen and euros are $.0073-81 and $1.125-45, respectively. What is the ask quote for yen in terms of euros
Financial reports particularly the importance of budgets : Provide your thoughts on the importance of internal financial reports particularly the importance of budgets in managing resources and obligations of company
Value of safeco stock when the required return : What is the value of Safeco stock when the required return is 15 percent?

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the times interest earned

Compute the Times interest earned, Debt ratio, Operating cash flow/total debt, Return on assets and Return on common equity.

  Analyze two proposed capital investments

Assume that you are the chief financial officer at Porter Memorial Hospital. The CEO has asked to to analyze two proposed capital investments ----Project X and Project Y. Each project requires a net investment outlay of $10,000, and the cost of capit..

  What is expected return on portfolio

Suppose you buy a stock for $30.2, receive a dividend of $1.3, and sell it for $48.28. What is your total rate of return? Suppose you buy a stock for $33.19, receive a dividend of $2.7, and sell it for $32.04. What is your dividend yield? What is the..

  Capital will be required throughout the life of the project

A project is expected to create operating cash flows of $32,000 a year for three years. The initial cost of the fixed assets is $66,000. These assets will be worthless at the end of the project. An additional $3,500 of net working capital will be req..

  Gathered projected cash flows for two projects

Textiles Unlimited has gathered projected cash flows for two projects. At what interest rate would the company be indifferent between the two projects? Which project is better if the required return is 12 percent?

  What is the equivalent present value of the prize

At the reading of the will, you learn that your inheritance will allow you to receive the amount of $5800 at the end of each year for a total of 14 consecutive years. However, because of your young age, these amounts will not begin until the end of 6..

  Nonconstant growth valuation-what is firm intrinsic value

Nonconstant growth valuation Hart Enterprises recently paid a dividend, D0, of $2.50. It expects to have nonconstant growth of 25% for 2 years followed by a constant rate of 7% thereafter. The firm's required return is 11%. What is the firm's horizon..

  Define the various capital budgeting methods

Define the various capital budgeting methods such as net present value (NPV), internal rate of return (IRR), and so on, and explain how they differ from one another. Identify which, if any, of the methods discussed might be superior to the others and..

  Target debt-equity ratio-what is the cost of equity

Fyre, Inc., has a target debt−equity ratio of 1.40. Its WACC is 8.3 percent, and the tax rate is 38 percent. If the company’s cost of equity is 15 percent, what is its pretax cost of debt? If instead you know that the aftertax cost of debt is 3.9 per..

  Pays off the loan after with the seventh payment

Ashley borrowed $2,000 from her bank to buy a new bedroom set. Interest on the loan totals $120, and the total of $2,120 is to be paid in 12 equal installments of $176.67. According to the Rule of 78s, how much interest will be rebated to Ashley if s..

  What is westons unlevered cost of equity capital

Weston Industries has a debt–equity ratio of 1.1. Its WACC is 9.6 percent, and its cost of debt is 7.2 percent. The corporate tax rate is 35 percent. What is Weston’s cost of equity capital? What is Weston’s unlevered cost of equity capital.

  What is the call premium of the bond

You own a bond with a 5.8 percent coupon rate and a yield to call of 6.7 percent. The bond currently sells for $1,098. If the bond is callable in five years, what is the call premium of the bond?

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