What is the firm current stock price

Assignment Help Finance Basics
Reference no: EM132436134

Assume that XY is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at 6% rate.

A) What is the firm's current stock price if the required rate is 10%?

B) Now assume that the stock is currently selling at $30. What is expected rate of return?

c) What would the stock price be if it's dividends were expected to have zero growth?

Reference no: EM132436134

Questions Cloud

Is managment acting in shareholders best interest : Your company's mangement immediately begins fighting off this hostile bid. Is managment acting in shareholders best interest? Why or why not?
How a merger may be beneficial for tax purposes : Explain how a merger may be beneficial for tax purposes. Why do you think the bankruptcy code provides a protection to borrowers?
Describe the conquests of Alexander the Great : Describe the conquests of Alexander the Great and analyze the legacy of his empire. mention his impact on Persia, India, and Egypt as
Explain role culture in create demand for suburban lifestyle : Explain role culture in create demand for suburban lifestyle.What do you think? What evidence would you use to support your position?
What is the firm current stock price : What is the firm's current stock price if the required rate is 10%?
What major changes in political structures and social : What major changes in political structures, and social and economic life, occurred during The Sui dynasty, The Tang dynasty,The Song dynasty
Moments of mean and standard deviation : A: From a portfolio perspective, explain the normal distribution and its two moments of mean and standard deviation.
What is the yield to maturity of the? bonds : Springfield Nuclear Energy Inc. bonds are currently trading at ?$792.09.The bonds have a face value of ?$1,000?, a coupon rate of 1?% with coupons
Describe the process of gentrification : Describe the process of gentrification, including the conditions that lead to a neighborhood being targeted for gentrification and the changes that occur

Reviews

Write a Review

Finance Basics Questions & Answers

  Position in the firm at the end of the year

How can this person maintain his income and his position in the firm at the end of the year?

  Cculate the next expected dividend per share d1 hint d0

radon homess current eps is 7.87. it was 4.33 5 years ago. the company pays out 40 of its earnings as dividends and the

  What is the current bond price

The bonds make annual payments. If the YTM on these bonds is 11 percent, what is the current bond price?

  Find the credit spread on the bbb bonds

What is the price (expressed as a percentage of the face value) of the treasury bond? What is the credit spread on the BBB bonds?

  What is the present value of his cash flows if he goes to

1. tvm. for this and the next 2 questions your brother just graduated from high school and is seeking your advice as

  Describe the cash conversion cycle

Describe some measures a firm can take to decrease its cash conversion cycle. Can the cash conversion cycle be negative? Explain.

  Connection between the value of shares and dividends

The company is "Adidas" like the shoes and clothing and the following are the questions I need help with for this company:

  Calculate your portfolio new beta

The portfolio's beta is 1.15. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1.55. Calculate your portfolio's new beta. Round your answer to two decimal places.

  What factors determine the required rate of return

What factors determine the required rate of return for any security?- What are the similarities and differences in preferred stock and debt as sources of financing for a firm?

  Unknown population standard deviation

Consider a normal population with an unknown population standard deviation. A random sample results in x = 48.68 and s2 = 33.64.

  Calculate the value of a bond that matures

Calculate the value of a bond that matures in 10 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market

  Cost of capital of investing in sanderson

If the cost of capital of investing in Sanderson is 8.6% per year, estimate the current price for Sanderson using the dividend discount model.

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