What is the value of the company stock-zero growth model

Assignment Help Financial Management

Reference no: EM131063112

The Johnson Company has been very successful in the past five years. Over these years, it paid common stock dividend of $ 3 in the first year, $3.20 in the second year, $4.2 in the third year, $4.5 in the fourth year and its most recent dividend was $4.80. The company wishes to continue this dividend indefinitely. What is the value of the company’s stock if the required rate of return is 11 percent? (zero growth model)

Reference no: EM131063112

Questions Cloud

To assess the value of the firm stock : Imprudential, Inc., has an unfunded pension liability of $573 million that must be paid in 20 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 6.6..

Numerous opportunities to expand in foreign countries : ABC Co. has recognized numerous opportunities to expand in foreign countries and has assessed many foreign markets, including Brazil, Greece, Mexico, Portugal, Singapore, and Thailand. What comparative advantage does ABC have when establishing a stor..

What is the return on the investment for the coming year : Oklahoma Instruments has a bond issue outstanding that pays $70 annually. It has a face value of $1,000, and it will mature in eight years. What will be the sale price and what is the return on the investment for the coming year?

What is the price of the stock at the year : Nu-Platinum is a highly successful mining company. The company just paid a dividend on the stock of $0.60. Business has been growing well over the past few years and is expected to do so at 25% for the next 3 years. If the required return is 20% what..

What is the value of the company stock-zero growth model : The Johnson Company has been very successful in the past five years. Over these years, it paid common stock dividend of $ 3 in the first year, $3.20 in the second year, $4.2 in the third year, $4.5 in the fourth year and its most recent dividend was ..

What is the intrinsic value of stock : Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 24% for two years and then at 5% thereafter. If the required return for Deployment Specialists is 9.5%, what is the intrinsic value of Deployment Specialists sto..

What are the industry dynamics : For this individual project you will play the role of an Investment Banker and analyze two companies in the same industry - Staples and Office Depot. You will have to make recommendations to managements of both companies in terms of optimizing their ..

Bond yield plus risk premium-capm cost of equity : Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model. Barton expects next year's annual dividend, D1, to be $2.40 and it expects ..

User Account

All Pages