What is the target stock price in five years

Assignment Help Financial Management

Reference no: EM131536439

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 $1.40. The dividends are expected to grow at 14 percent over the next five years. In five years, the estimated payout ratio is 40 percent and the benchmark PE ratio is 26.

What is the target stock price in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Target stock price $

What is the stock price today assuming a required return of 12 percent on this stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price $

Reference no: EM131536439

Questions Cloud

Expansionary fiscal policy by increasing : How does the Singapore government employs expansionary fiscal policy by increasing its spending to help business and households in order to reduce unemployment?

What is his new balance : Chase has a $42,500 line of credit which charges an annual percentage rate of prime rate plus 5%. what is his new balance?

Determine the amount of anny brum capital : Anny's Dry Cleaners is owned and operated by Anny Brum. A building and equipment are currently being rented, pending expansion to new facilities.

Use of economic stabilisation policies : Discuss the main arguments put forward in support of the use of economic stabilisation policies and against the use of economic stabilisation policies.

What is the target stock price in five years : What is the target stock price in five years? What is the stock price today assuming a required return of 12 percent on this stock?

Portfolio expect in regards to unsystematic risk : What should the owner of this portfolio expect in regards to unsystematic risk?

Enter the transactions in the accounts of b pratt : ?. Pratt commenced business on 1st January, 1962, with a capital of £3,000 cash. The following transactions took place.

Calculate the benefit-to-cost ratio : Calculate the Benefit-to-Cost Ratio (B/C) if actual damages awarded against Ford for 1972 injuries totaled $128,060,000 with all other variables remaining same

Discuss the all transactions of turner : You are asked to prepare from the above information Smiths account as it would appear in Turners ledger, balancing it and bringing down the balance on the 31st.

User Account

All Pages