What is the price of a share of hnh stock now

Reference no: EM131982190

Question: The HNH Corporation will pay a constant dividend of $2 per share, per year, in perpetuity. Assume all investors pay a 25% tax on dividends and that there is no capital gains tax. Suppose the other investments with equivalent risk to HNH stock offer an after-tax return of 14%.

a. What is the price of a share of HNH stock?

b. Assume that management makes a surprise announcement that HNH will no longer pay dividends but will use the cash to repurchase stock instead. What is the price of a share of HNH stock now?

Reference no: EM131982190

Questions Cloud

Find the required rate of return on a portfolio : What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place.

Write a Business Plan : NEF4105 - Professional Engineering Practice Assignment - Business Planning. Write a Business Plan, in teams of two, for starting an Engineering-related business

Determine what type of graph would be the most appropriate : Draw conclusions - Based on your observations and your graph, would you reject or accept the hypothesis you made in Question 3? Why?

What mass in grams of black iron oxide is produced : (a) When 36.0 g H2O are mixed with 67.0 g Fe, which is the limiting reagent? (b) What mass in grams of black iron oxide is produced?

What is the price of a share of hnh stock now : Assume that management makes a surprise announcement that HNH will no longer pay dividends but will use the cash to repurchase stock instead.

What was her percent yield of reaction : A chemistry student obtained a yield of 3.80 g of H2O(l), at room temperature, from the reaction of 1.60 g H2(g) with 10.0 g O2(g).

What is the holding rate of return for given investment : What is the holding rate of return for a 20 year investment that earns 5% per year, each year? What would a $200 investment grow into?

What is the empirical formula of a compound containing c : What is the empirical formula of a compound containing C, H, and O if combustion of 1.23 g of the compound yields 1.8 g CO2 and 0.74 g H2O

What is the empirical formula of a compound : What is the empirical formula of a compound containing C, H, and O if combustion of 1.23 g of the compound yields 1.8 g CO2 and 0.74 g H2O

User Account

All Pages