What is the expected return and growth rate

Assignment Help Financial Management

Reference no: EM132006009

A company has an 11.5% return on equity and pays out 45% of its earnings as dividends. It recently paid a dividend of $3.25. The stock is selling for $40 per share.

What is the growth rate?

What is the expected return?

If you require a return on 13% per annum, should you purchase the stock? Show step by step how to solve each question with formulas or excel.

Reference no: EM132006009

Questions Cloud

Intrinsic value of the investors required rate of return : What is the intrinsic value of the investors' required rate of return is 9%?

What is the value of the share to the investor : What is the expected rate of return? If an investor’s rate of return is 10% per annum, what is the value of the share to the investor?

What is tax deduction and equal-dollar-amount tax credit : What is a tax deduction and an equal-dollar-amount tax credit? Are there two ways to pay tax?

Decision rules under each payback-npv and irr methods : What is the accept/reject decision rules under each payback, NPV and IRR methods?

What is the expected return and growth rate : A company has an 11.5% return on equity and pays out 45% of its earnings as dividends. What is the growth rate? What is the expected return?

Large part of the firm cash to new product line : Executives at Lululemon Athletica have just written a plan that allocates a large part of the firm's cash to a new product line.

Firm equity after the capital structure adjustment : How much would be market value of firm’s equity after the capital structure adjustment?

What is value of stock if investors require rate of return : What is the value of the stock if investors require a rate of return of 11% per annum? How does the price change if the growth rate is 6% per annum?

Calculate the expected dividend yield : Calculate the growth rate in dividends. Calculate the expected dividend yield.

User Account

All Pages