What is the most you would pay per share

Assignment Help Financial Management

Reference no: EM13917500

The dividend for Should I, Inc., is currently $1.50 per share. It is expected to grow at 16 percent next year and then decline linearly to a 4 percent perpetual rate beginning in four years. If you require a 12 percent return on the stock, what is the most you would pay per share?

Reference no: EM13917500

Questions Cloud

The expected return on parador stock : The current price of Parador Industries stock is $47 per share. Current earnings per share are $5, the earnings growth rate is 7 percent, and Parador does not pay a dividend. The expected return on Parador stock is 19 percent.

Geometric center of the town with predominantly all grass : A town center is in the geometric center of the town with predominantly all grass and a few walkways through it. They are willing to spend $30,000 (split evenly with one payment now, and then at the end of the year and the year after that) to build t..

What is the value of the stock today : Could I Industries just paid a dividend of $1.87 per share. The dividends are expected to grow at a 15 percent rate for the next 3 years and then level off to a 5 percent growth rate indefinitely. If the required return is 17 percent, what is the val..

Which investment should firm choose if cost of capital : Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respe..

What is the most you would pay per share : The dividend for Should I, Inc., is currently $1.50 per share. It is expected to grow at 16 percent next year and then decline linearly to a 4 percent perpetual rate beginning in four years. If you require a 12 percent return on the stock, what is th..

What about triple in value and Probability of doubling : Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 17.1 percent and the standard deviation of those returns in this period was 41.7 percent. What about triple in value?..

Research the variables that impact the pricing of options : Research the variables that impact the pricing of options. Focus your energy on comparing the attributes of the two widely accepted models used for option pricing: Black-Scholes and Binomial Models.

Which will have the highest future value : Your mother is trying to choose one of the following bank CDs to deposit $10,000. Which will have the highest future value if she plans to invest for three years? (A) 3.50% compounded daily (B) 3.25% compounded monthly (C) 3.40% compounded quarterly ..

Measuring risk for discrete distributions : You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stocks A and B have the following historical returns: Calculate the average rate of return for each stock during the 5-year pe..

User Account

All Pages