What is the value of stock expected to pay constant

Assignment Help Financial Management
Reference no: EM132061277

1. What is the estimated value of a stock, which paid a $5 dividend this year, expects dividends to grow at 6 percent, and requires a 20 per cent return?

2. What is the required rate of return on a stock if the risk-free rate is 7%, the return on the market portfolio is 15%, and the beta is 1.5?

3. What is the value of a stock expected to pay a constant $5 dividend each year forever, if the market required rate of return is 18%?

4. A stock just paid an annual dividend of $2. The dividends are expected to grow at 20% per year over each of the next three years and 5% per year thereafter. What is the value of the stock if the required rate of return is 12%?

Reference no: EM132061277

Questions Cloud

What are the benefits of creating personal financial plan : What is financial planning? What are the benefits of creating a personal financial plan?
What is the exchange rate risk and foreign exchange rate : What is a foreign exchange rate? What is the exchange rate risk? Which CD should the Detroit investor take and why?
How do they apply to the time value of money concepts : Where in finance would APR or EAR concepts apply? How do they apply to the Time Value of Money concepts we are covering this week?
How would you use binomial option model to price put options : How would you use binomial option model to price put options? Consider a put option on a stock with a strike of $120.
What is the value of stock expected to pay constant : What is the value of a stock expected to pay a constant $5 dividend each year forever, if the market required rate of return is 18%?
How many contracts should the pension fund : How many contracts should the pension fund use and should they buy or sell the contracts?
Nonprofit hospital in competitive metropolitan market : You are a junior analyst at a 500-bed nonprofit hospital in a competitive metropolitan market.
Funds on the speculator account after marking-to-market : What is the amount of funds on the speculator’s account after marking-to-market?
The current effective annual risk-free rate : What is the fair forward price if the current effective annual risk-free rate over one month is 4%?

Reviews

Write a Review

Financial Management Questions & Answers

  What will the company cash dividend be in seven years

What will the company’s cash dividend be in seven years?

  Calculating the cost of equity

Floyd Industries stock has a beta of 1.20. The company just paid a dividend of $.50, and the dividends are expected to grow at 6 percent per year.

  Firm need to be concerned with the welfare of employees

Or do corporations need to pay attention to other stakeholders as well? Does the firm need to be concerned with the welfare of its employees?

  European call option-what is a fair price for this option

A dealer offers you a 6-month European call option with an exercise price of $40. What is a fair price for this option?

  Generally considered a cost of going public

Which of the following is not generally considered a cost of going public?

  Founded the hospital for toys and puppets

Willy Wonka just founded the Hospital for Toys and Puppets. The hospital is an independent non-profit entity.

  The purchase of new automated plant costing

A firm is contemplating the purchase of new automated plant costing $240,000 to replace a n existing machine that can be sold for $ 110 ,000 today . The existing machine (which can continue to be operated for a further four years) was purchased one y..

  Calculation and precisely define forward hedge

How much would Roberto receive if he used a forward hedge? Explain your calculation and precisely define a forward hedge.

  House in the future and recently received inheritance

Future Value. You are hoping to buy a house in the future and recently received an inheritance of $22,000.

  Various factors affect the cash flow of corporation

Interpret the various factors affect the cash flow of a Corporation.

  Find the value for european put option

Use the Black-Scholes model to find the value for a European put option that has an exercise price of $62.00 and four months to expiration.

  Using the activity-based costing system

How much overhead cost would be assigned to Product V09X using the activity-based costing system?

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