What is the target share price in seven years

Assignment Help Financial Management
Reference no: EM13870595

Davis, Inc., currently has an EPS of $2.16 and an earnings growth rate of 7 percent. The benchmark PE ratio is 20.

What is the target share price in 7 years?

Reference no: EM13870595

Questions Cloud

How much should you be prepared to pay for the stock : You believe that the Non-stick Gum Factory will pay a dividend of $3 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 2% a year in perpetuity. If you require a return of 12% on your investment, how much should you ..
What would the annual yield to maturity be on the bonds : A few years ago Spider web inc issued with a 11.79 percent annual coupon rate paid semiannually. The bonds have a par value of $1,000 a current price of $702 and will mature in 23 years. What would the annual yield to maturity be on the bonds if you ..
An at- the- money call option with strike : An at- the- money call option with a strike of 50, 24 days left to expiration and a risk free rate of 0.25% is trading at $1.03. Using the Black-Scholes formula, what will be the price of this option one day later, assuming that all other inputs rema..
What is the target stock price in five years : In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1...
What is the target share price in seven years : Davis, Inc., currently has an EPS of $2.16 and an earnings growth rate of 7 percent. The benchmark PE ratio is 20. What is the target share price in 7 years?
What is the rate of inflation : The nominal rate of return on the bonds of Stu's Boats is 9.25 percent. The real rate of return is 3.9 percent. What is the rate of inflation?
Natural gas futures to hedge its costs of power production : Chevron is considering the use of natural gas futures to hedge its costs of power production. Which of the following methods is Chevron most likely to use to deem this hedge highly effective?
What is the firms value of operations in millions : Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of..
Soybean futures price changes and cost of goods sold : The accountants of Coca-Cola just determined using the regression method that soybean futures barely qualify for hedging its exposure to variations in cost of goods sold( R-squared = 0.81). What can you conclude about the correlation between soybean ..

Reviews

Write a Review

Financial Management Questions & Answers

  Assumption for future dividend growth rate

Our company is Target? First search the Yahoo finance and find the target data? Use dividend discount model to calculate the cost of equity Explain and conceptually justify your assumption for future dividend growth rate

  Immediately after coupon payment-calculate the market price

A $10,000 par value bond with coupons at 8%, convertible semi-annually, is being sold three years and four months before the bond matures. The bond is redeemable at $C, and purchase will yield 6% convertible semi-annually to the buyer.

  Compute the accounting rate of return on the project

Calculate the accounting rate of return on the project. Which projects are acceptable according to this criterion? (Note: Assume net income is equal to after-tax cash flow less depreciation)

  Downward sloping demand curve-marginal revenue is always

Suppose a monopolist producing self-cleaning jackets can sell 20 jackets at $100, and 21 jackets at $98. The monopolist is unable to price discriminate, so in order to sell a total of 21 jackets, the price per jacket must be $98.

  Assume interest is compounded monthly

You need to save a total of $12,000 in order to buy a new boat. You are starting with no savings, but you will be able to deposit $40 per month. How long do you need to save in order to reach your goal? In excel, compute and graph the number of years..

  Leverage measure and about common stock

Which one of the following statements about common stock is true? Substituting EBITDA for EBIT when computing the times interest earned ratio will make the company appear. Which one of the following is a leverage measure?

  Standard deviation and positive equity

A bank estimates that its profit next year is normally distributed with a mean of 0.8% of assets and the standard deviation of 2% of assets. How much equity (as a percentage of assets) does the company need to be (a) 99% sure that it will have a posi..

  What is split between initial and seasoned equity offerings

What are the general trends regarding public security issuance by U.S. corporations? Specifically, which security type is most often sold to the public? What is the split between initial and seasoned equity offerings?

  Is it possible for a firm to have too much cash

Is it possible for a firm to have too much cash? Why would shareholders care if a firm accumulates large amounts of cash? What options are available to a firm if it believes it has too much cash? How about too little?

  Stock price appreciated significantly only after release

You own stock in XYZ Company which operates in the pharmaceutical industry. This company is on the verge of a drug that can revolutionize cancer treatment and this information has just been released to the public. The stock price appreciated signific..

  Planning to save for retirement

You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 11% APR compounded monthly, and the bond..

  What is the present value per year

What is the present value of $1,100 per year, at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 30 years from now?

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