What is the market value of this stock

Assignment Help Financial Management
Reference no: EM131839750

Avatar Manufacturing is going to retain more of its earnings to help finance its growth. It will reduce its annual dividends by 20 percent a year for the next 3 years. After that, it will maintain a constant dividend of $1.60 per share. Last year the annual dividend was $2.60 per share. The required rate of return is 13%. What is the market value of this stock? -Note: I know that the answer is $12.60. I need to know how to get that answer. NOT using Excel. I also have a financial calculator (BA II Plus) and am fluent in most functions.

Reference no: EM131839750

Questions Cloud

Sloped yield curve implies an expectation of falling future : A negatively sloped yield curve implies an expectation of falling future, short-term interest rates,
What is the value of the firm using wacc : What is the value of the firm using WACC as the appropriate discount rate?
Makes the two series of cash flows described : What value of G makes the two series of cash flows described below equivalent at an interest rate of 3% per year, compounded every 3 months?
What is your rate of return on the fund : What is your rate of return on the fund if you sell your shares at the end of the year?
What is the market value of this stock : Avatar Manufacturing is going to retain more of its earnings to help finance its growth. What is the market value of this stock?
What is the dollar duration of the forward contract : The 0.5-year zero coupon rate is 2% and the 1-year zero coupon rate is 3%. What is the dollar duration of the forward contract?
Introducing one of two new mutually exclusive menu items : Taco Bell is considering introducing one of two new mutually exclusive menu items.
What is the ordinary payback period for this project : You are considering opening new restaurant in downtown Chicago that even Gordon Ramsay would be proud of. What is the ordinary payback period for this project?
Represent cash outflow for the payment of dividends : Note that even though your answer will represent a cash outflow for the payment of dividends,

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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