What is the stock''s expected price 3 years from today

Assignment Help Finance Basics

Reference no: EM13796908

ABC Enterprises' stock is expected to pay a dividend of $0.3 per share. The dividend is projected to increase at a constant rate of 5.9% per year. The required rate of return on the stock is 19.6%. What is the stock's expected price 3 years from today (i.e. solve for P3)? Assume that you wish to purchase a 19-year bond that has a maturity value of $1,000 and a coupon interest rate of 8%, paid semiannually. If you require a 4.79% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV. ABC Inc., is expected to pay an annual dividend of $4.4 per share next year. The required return is 17.5 percent and the growth rate is 4.6 percent. What is the expected value of this stock five years from now? ABC wants to issue 8-year, zero coupon bonds that yield 7.61 percent. What price should they charge for these bonds if they have a par value of $1,000? That is, solve for PV. Assume annual compounding. Hint: zero coupon bonds means PMT = 0 The common stock of Connor, Inc., is selling for $77 a share and has a dividend yield of 3.9 percent. What is the dividend amount? The 5.16 percent, $1,000 face value bonds of Tim McKnight, Inc., are currently selling at $1,015.32. What is the current yield? Stealers Wheel Software has 9.99% coupon bonds on the market with nine years to maturity. The bonds make semi-annual payments and currently sell for 104.68% of par. What is the current yield? ABC just paid a dividend of D0 = $2.8. Analysts expect the company's dividend to grow by 32% this year, by 24% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 13%. What is the best estimate of the stock's current market value? The 13.34 percent coupon bonds of the Peterson Co. are selling for $1,125.43. The bonds mature in 5 years and pay interest semi-annually. These bonds have current yield of _____ percent. ABC's last dividend paid was $1.7, its required return is 18.6%, its growth rate is 7%, and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is P7? The common stock of Wetmore Industries is valued at $24.9 a share. The company increases their dividend by 3.7 percent annually and expects their next dividend to be $5.3. What is the required rate of return on this stock? ABC has issued a bond with the following characteristics: Par: $1,000; Time to maturity: 19 years; Coupon rate: 5%; Assume semi-annual coupon payments. Calculate the price of this bond if the YTM is 5.16%

Reference no: EM13796908

Questions Cloud

Describe the physical emotional and cognitive effects : Describe the physical, emotional, and cognitive effects stress can have on an individual. Explain two to three effective strategies that can reduce stress

What were the key components of the change effort : Why did Singapore decide to change its libraries. How significant was the change, and how would you characterize it from a strategic perspective. What is the equivalent to this change for a typical for-profit company

Differences between soluble fiber and insoluble fiber : What have you learned about your eating habits? Pay attention to the codes you assigned to your foods.

If the cost of rare earth increases : If the cost of rare earth (a resource for producing smartphones) increases, then supply for Samsung smartphones will _____, and quantity will _____.

What is the stock''s expected price 3 years from today : ABC Enterprises' stock is expected to pay a dividend of $0.3 per share. The dividend is projected to increase at a constant rate of 5.9% per year. The required rate of return on the stock is 19.6%. What is the stock's expected price 3 years from toda..

How does the rubbed balloon affect the paper bits : What can you make the balloon stick to? Does it stick better to some surfaces? Why? Does rubbing with fur work as well as, better than, or worse than if you rub the balloon against your hair instead? How does the rubbed balloon affect the paper bits

What is your product or service : What is your product or service? Which form of ownership will you use? What are the pros of that ownership? What are the cons? Will you franchise? Why or why not.

Demand shifts right when : Demand shifts right when:

Describe managed care services cost and utilization : Define basic terminology/features of health insurance and describe managed care services cost and utilization control tools relating to insurance reimbursement.

User Account

All Pages