What is the value per share of your firms stock

Assignment Help Financial Management

Reference no: EM13913842

Assume that the average firm in your company's industry is expected to grow at a constant rate of 4% and that its dividend yield is 6%. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&D work that leads you to expect that its earnings and dividends will grow at a rate of 50% [D1 = D0(1 + g) = D0(1.50)] this year and 30% the following year, after which growth should return to the 4% industry average. If the last dividend paid (D0) was $1.5, what is the value per share of your firm's stock? Round your answer to the nearest cent. Do not round your intermediate computations.

Reference no: EM13913842

Questions Cloud

Required return equal to the expected return : Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $2.00 coming 3 years from today. what is..

What is the stockholders equity at the end of the year : At the beginning of the year, Sun Company's assets were $275,000, and its stockholders' equity was $150,000. What is the stockholders' equity at the end of the year?

What is his average velocity : A man leaves the garrage in his house and drives to a neighbouring town which is twenty kilometres away from his house on sight-seeing. He returns home to his garrage two hours after. What is his average velocity from home in km/h?

Garrison shops had a suta tax rate : Garrison Shops had a SUTA tax rate of 2.7%. The state's taxable limit was $8,000 of each employee's earnings.

What is the value per share of your firms stock : Assume that the average firm in your company's industry is expected to grow at a constant rate of 4% and that its dividend yield is 6%. Your company is about as risky as the average firm in the industry. what is the value per share of your firm's sto..

Identify strategic aspects of levi positioning exercise : The Levi product has not really changed since the Gold Rush days. How do you account for the phenomenal transformation to become an American icon and 'coveted symbol of the casual, unpretentious American lifestyle'?

Brady construction company contracted to build an apartment : Brady Construction Company contracted to build an apartment complex for a price of $6,000,000. Construction began in 2016 and was completed in 2018

Required to pay unemployment taxes : Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows:

Covariance of returns between willow stock and sky diamond : The covariance of the returns between Willow Stock and Sky Diamond 0.0950. The variance of Willow is 0.2330 and the variance of Sky Diamond is 0.1240. What is the correlation coefficient between the returns of the two stocks?

User Account

All Pages