What is the current value of the stock to susan

Assignment Help Financial Management

Reference no: EM13928432

Watkins, Inc., has experienced an explosion in demand for its ram football novelties. The firm currently (time 0) pays a dividend of $0.50 per share. This dividend is expected to increase to $1.00 per share 1 year from now. It is expected to grow at a rate of 20 percent per year for the next 7 years. Susan seeks your advice regarding the current value of this stock. Susan plans to purchase this stock today, if the price is right, and to hold it for 3 years. She believes that the stock will increase in value to $40 at the end of 5 years. What is the current value of this stock to Susan if she requires a 20 percent rate of return on stocks of this risk level?

Reference no: EM13928432

Questions Cloud

What is the current value of the stock to coley : He believes that the stock will increase in value to $30 at the end of 4 years. What is the current value of this stock to Coley if he requires a 20 percent rate of return on stocks of this risk level?

Historical perspective-us foreign policy : Pick two (2) similar federal policies that were discussed over a span of two (2) different administrations. For example, President Clinton's and Obama's healthcare policies or President's George H.W. Bush's and George W. Bush's foreign policy.

The expenditure improved the compressor operating capacity : The expenditure improved the compressor's operating capacity.

Explanation of the cartesian method : Write a 1-2-page explanation of the Cartesian Method and identify some of the potential problems with, and appeal of, this approach. Try to illustrate key aspects of this method with your own examples

What is the current value of the stock to susan : What is the current value of this stock to Susan if she requires a 20 percent rate of return on stocks of this risk level?

Individual assignment jamona corp scenario : On January 1, 2006, Jamona Corp. purchased 12% bonds, having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2006, and mature January 1, 2011, with interest receivable De..

What value would whitehurst place on the ivanhoe stock : If Whitehurst requires a 12 percent rate of return on investments of this type, what value would Whitehurst place on the Ivanhoe stock?

How much would you pay for one share of stock today : The Alpha Tool Corporation has never paid a dividend, but the new company president has announced. If you require a 15 percent rate of return on this stock, how much would you pay for one share of stock today?

How were children affected during the time of slave trade : How were children affected during the time of slave trade? Numerous literature on slavery are available but little has been covered regarding children aspect. How were children affected? Were children part and puzzle of slave trade?

User Account

All Pages