What is the current value of one share of this stock

Assignment Help Financial Management

Reference no: EM132040435

1. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 18 percent a year for the next 4 years and then decreasing the growth rate to 3 percent per year. The company just paid its annual dividend in the amount of $2.50 per share. What is the current value of one share of this stock if the required rate of return is 8.00 percent?

$85.93

$102.35

$99.85

$73.39

$88.43

2. Sprockley Company has just paid a $1 per share dividend. It is expected that dividends will grow at 16% per year for the next 2 years, at 10% the third year and 8% in year 4. After that, dividend growth is expected to be 3% per year forever. Sprockley’s equity ? is 0.9. If Treasury bills yield 5% and the market risk premium is 8.3%, what should be Sprockley’s current stock price?

$10.00

$12.05

$15.00

$42.00

$45.75

Reference no: EM132040435

Questions Cloud

Portfolio standard deviation and diversification : Portfolio standard deviation and diversification. you calculate the standard deviation of the equally weighted portfolios with 10, 20, and 50 assets.

Calculated by regressing stock historic returns : If the slope of the best-fit line calculated by regressing a stock’s historic returns against the market’s historic returns is positive, then the stock:

What would be cost of new equity : New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity?

Considering investing in shares of macleod industries : You are considering investing in shares of MacLeod Industries, which is currently trading at $50 per share,

What is the current value of one share of this stock : What is the current value of one share of this stock if the required rate of return is 8.00 percent?

What’s the project discounted payback : What’s the project’s MIRR? What’s the project’s payback? What’s the project’s discounted payback?

What is your best guess as to rate of return on stock : If the market return this year turns out to be 10 percentage points below expectations, what is your best guess as to the rate of return on the stock?

What is this cancellation option worth today : From the standpoint of John Deere, what is this cancellation option worth today?

Calculate the required rate of return on security with beta : Calculate the required rate of return on a security with a beta of 2.16.

User Account

All Pages