What is the current price per share if the required return

Assignment Help Financial Management
Reference no: EM13943777

Whistle Stop Trains pays a constant $16 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15 percent?

Reference no: EM13943777

Questions Cloud

Describe an algorithm for sorting : The integers are NOT sorted and you CANNOT sort them. You need to see if the numbers would match the pattern if you were to sort them.
Calculate NPV of this investment using an Excel spreadsheet : Whoopie Cushions, Inc. is analyzing the proposed purchase of a new machine for $550,000. The proposed machine has an estimated economic life of six years but will be treated as five-year MACRS property for depreciation purposes. Calculate the NPV of ..
Prepare the journal entry to record the write-off of default : The Rock has credit sales of $650,000 during 2010 and estimates at end of 2010 that 3 percent of these credit sales will eventually default. Prepare the journal entry to record the write-off of the defaulted $1,225 balance.
Aerotron electronics has just bought a used delivery : Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years..
What is the current price per share if the required return : Whistle Stop Trains pays a constant $16 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15 ..
New machine which will reduce manufacturing costs : Stanton Inc. is considering the purchase of a new machine which will reduce manufacturing costs by $5,000 annually and increase sales by $6,000 annually. Stanton will use the MACRS method to depreciate the machine, and it expects to sell the machine ..
Four-year project to improve production efficiency : Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $440,000 is estimated to result in $175,000 in annual pretax cost savings.  Calculate the NPV of this project.
Peroni company paid wages : Peroni Company paid wages of $170,900 this year. Of this amount, $114,000 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company.
What is the systemic risk for this stock : If we have Stock A with required rate of return each to 15%, risk free rate of reture is 3%, the expected return for the market portfolio is 7%. what is the systemic risk for this stock. does this stock have higher or lower risk than the market. what..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the firms earnings growth rate

The newspaper reported last week that Bennington Enterprises earned $34.02 million this year. The report also stated that the firm’s return on equity is 14 percent. Bennington retains 70 percent of its earnings. What is the firm's earnings growth rat..

  Higher standard deviation than stock

Please shortly explain how they arrived at the answers below? Stock A has a beta of 1.5, and stock B has a beta of 1.0. Determine whether each of the statements below is true or false. Stock A must have a higher standard deviation than Stock B. Stock..

  Existing bond that annual coupon payments

Bond Valuation Assume the following information for an existing bond that provides annual coupon payments: What is the present value of the bond? If the required rate of return by investors were 14 percent instead of 11 percent, what would be the pre..

  What would the total present value of the bond be

If a group has just issued a $100,000 par value bond paying 6% interest with 8 years til maturity. Assuming the current yield on the bond is 10%, what would the total present value of the bond be? How this would be solved

  Difference between this bonds YTM and its YTC

McCue Inc.'s bonds currently sell for $1,250. They pay a $90 annual coupon, have a 25-year maturity, and a $1,000 par value, but they can be called in 5 years at $1,050. Assume that no costs other than the call premium would be incurred to call and r..

  The market requires an interest rate

Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 8.2% on these bonds. What is the bond's price?

  A discount factor

A discount factor:

  Calculate the after-tax component cost of capital

Calculate the after-tax component cost of capital, kc, for a 7.5 percent convertible debenture sold at par and due to mature in 25 years.

  After-tax operating income is calculated as EBIT

Retained earnings as reported on the balance sheet represent cash and, therefore, are available to distribute to stockholders as dividends or any other required cash payments to creditors and suppliers. After-tax operating income is calculated as EBI..

  What is amount of the dividend check the dawson couple

Jamie and Peter Dawson own 220 shares of Duke Energy Common stock. Duke energy's quarterly dividend is $0.28 per share. What is the amount of the dividend check the Dawson couple will receive for this quarter?

  Calculate your net profit and loss on the option contract

You have purchased a call option contract on GE common stock. The option has an exercise price of $79.00 and GE stock currently trades at $80.43. The option premium is quoted at $2.17 per contract (1 contract = 100 shares). Calculate your net profit/..

  Determine the equivalent taxable yield

A client in the 33 percent marginal tax bracket is comparing a municipal bond that offers a 5.80 percent yield to maturity and a similar-risk corporate bond that offers a 7.10 percent yield. Determine the equivalent taxable yield.

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