What is the most should be willing to pay for a share

Reference no: EM13286515

Fred Tibbits has made a detailed study of the demin clothing industry. He's particularly interested in a company called Denhart Fashions that makes stylish denim apparel for tenagers and children. Fred has done a forecast of Denhart's earnings and looked at its dividend payment record. He's come to the conclusion that the firm will a dividend of $5.00 for the next two years followed by a year of $6.50. Fred's investment plan is to buy Denhart now, hold it for 3 years, and then sell. He thinks the price will be about $75 when he sells. What is the most should be willing to pay for a share of Denhart if he can earn 10% on investments of similar risk?

Reference no: EM13286515

Questions Cloud

Is it a bargain if its selling at $76 a share : The Pancake Corporation recently paid a $3 dividend and is expected to grow at 5% forever. Investors generally require an expected return of at least 9% before they'll buy stocks similar to those of Pancake.

Find some alternative to multiplication of m with cos : Fortunately, for this purpose, we can replace multiplication with switching operation. A similar observation applies to demodulators. In the scheme depicted in fig p7-40a, the period of the rectangular periodic pulse x(t) shown in Fig. P7-40b is T..

Find the magnitude of the tension in the horizontal string : A small positively charged sphere of mass 4.68 g and charge +72 micro C is suspended horizontally in static equilibrium, find the magnitude of the tension in the horizontal string

What would you expect the stocks price to be in five years : Mitech Corp's stock price has been growing at approximately 8% for several years, and is now $30. Based on past growth rate performance, what would you expect the stocks price to be in five years?

What is the most should be willing to pay for a share : He thinks the price will be about $75 when he sells. What is the most should be willing to pay for a share of Denhart if he can earn 10% on investments of similar risk?

State what is the molar mass of the gas : An experiment shows that a 248 ml gas sample has a mass of 0.435 g at a pressure of 747 mm Hg and a temperature of 26 c. What is the molar mass of the gas?

Compute its steady-state temperature : At our distance from the Sun, the intensity of solar radiation is 1370 W/m2. Compute its steady-state temperature

Write a vhdl module to implement a circuit to generate clock : write a VHDL module to implement a circuit that can generate a clock signal whose time period is a multiple of the input clock. A control signal F determines the multiplying factor. If F=0 the output signal has a time period twice that of the inpu..

Explain what is the 1,3-diaxial interaction : The 1,3-diaxial interaction energy between H and a lone pair is negligible (~ 0 kcal/mol). What is the 1,3-diaxial interaction (in kcal/mol) between a CH3 and a p orbital

User Account

All Pages