What is the intrinsic value of stock today

Assignment Help Financial Management
Reference no: EM131972719

1. What is the value of a preferred stock (assume: Zero growth) paying a fixed dividend of $5 per share when the discount rate is 9%?

a. 51.24

b. 78.80

c. 55.56

d. 44.23

2. High Flyer industries just paid its annual dividend of $4 per share.The dividend is expected to grow at 11% indefinitely. The beta is 1.5,Rfr is 5%. Market risk premium is 7.5%. What is the intrinsic value of the stock?

a. 84.57

b. 25.45

c. 31.45

d. 36.63

Reference no: EM131972719

Questions Cloud

What is the rate of return on total assets : Its total assets are $100,000, of which $25,000 are current assets and $75,000 are fixed assets. What is the rate of return on total assets?
Used to evaluate individual employees of company : How can the balanced scorecard be used to evaluate individual employees of a company?
What is effective rate of interest if the loan is discounted : Effective rate on discounted loan, Sol Pine borrows $5,000 for one year at 13 percent interest. What is the effective rate of interest if the loan is discounted
The least-expensive car for your new delivery service : You are trying to pick the least-expensive car for your new delivery service. If the business has a cost of capital of 13 percent, calculate the EAC.
What is the intrinsic value of stock today : The beta is 1.5,Rfr is 5%. Market risk premium is 7.5%. What is the intrinsic value of the stock?
The dollar for spot and three-months forward : He receives the following quotes for Swiss francs against the dollar for spot and 3-months forward.
What is equivalent equal annual cost of fuel for five years : What is the equivalent equal annual cost of fuel for the 5 years?
What is the current price of bond : What is the present value of a $1000-payment, 100-year ordinary annuity if the interest rate is 7% per year? what is the current price of the bond?
Explain what would happen to interest rates and bond prices : Explain what would happen to interest rates and bond prices in the U.K. and explain why that would happen in an essay.

Reviews

Write a Review

Financial Management Questions & Answers

  How much would you be willing to pay for a ticket to draw

If you are offered $20 to draw a red ball from a bag that contains six green balls, two blue balls, and two red balls, how much would you be willing to pay for a ticket to draw?

  Pays current dividend and is expected to grow

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 22% for two years and then at 7% thereafter. If the required return for Deployment Specialists is 12.0%, what is the intrinsic value of Deployment Specialists st..

  Calculate the amount of interest earned on this account

Choose a scenario of savings in a retirement plan such as a 401(k) or an annuity. Plan a monthly deposit (you choose the amount, but be realistic) for 5 years into an account that will earn interest at 5%. Find the future value for this account. Calc..

  What was the cash flow to stockholders for year

If the company paid out $680,000 in cash dividends during 2009, What was the cash flow to stockholders for the year?

  What is percys cost of common equity

Percy Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 15.00%...

  What is your recommendation for the death star project

The Empire is planning to create the first ever Death Star. Darth Vader, the Emperor’s right hand man and the manager of the project, has asked you to evaluate the project. Here is some of the information that you need to evaluate the project. What i..

  Sales under the percent-of-sales forecasting method

A firm has targeted a 40% growth in sales this year. Last year's cash as a percent of sales was 15%, accounts receivable 30%, and inventory 35%. What percentage growth in current assets is required to support the growth in sales under the percent-of-..

  Underwriting discount as percent of ipo price for each ipo

What is the underwriting discount as a percent of the IPO price for each IPO? What percent of the total shares are liquefying selling shareholders for each IPO?

  What is the market value of equity

Ciba Inc`s expected Yield is 4%. The capitalization rate is 3.25% and the overall cost of debt is 1.85%. If the market value of debt is 3M…what is the market value of Equity?

  Capital structure based on current market values

Capital Co. has a capital structure, based on current market values, that consists of 50 percent debt, 10 percent preferred stock, and 40 percent common stock. If the returns required by investors are 8 percent, 10 percent, and 15 percent for the deb..

  Dividend is expected to grow at some constant rate

Justus currently sells for $35.00 a share, and its dividend is expected to grow at some constant rate,

  Components of traditional balance sheet

The following items are components of a traditional balance sheet. How much are the total assets of the firm

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