What is this stock expected total rate of return

Assignment Help Accounting Basics
Reference no: EM133041865

Question - Return on Common Stock - You buy a share of The Ludwig Corporation stock for $23.40. You expect it to pay dividends of $1.00, $1.0660, and $1.1364 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $28.35 at the end of 3 years.

A) Calculate the growth rate in dividends. Round your answer to two decimal places.

B) Calculate the expected dividend yield. Round your answer to two decimal places.

C) Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM133041865

Questions Cloud

Different styles of leadership : -Based on the different styles of leadership, which style would be most appropriate to address the issue with the ES employees? Why?
Project oxygen resuscitates google poor-performing bosses : When it comes to gathering data and analyzing it to build new and better products, few companies do it as well as Google.
What is your company weighted average flotation cost : The flotation cost for new equity is 7 percent, but the flotation cost for debt is only 4 percent. What is your company weighted average flotation cost
Analyze the existing strategic plan of the vodafone fiji : Problem: Briefly analyze the existing strategic plan of the Vodafone Fiji? Create and come up with A NEW STRATEGIC PLAN of the Vodafone?
What is this stock expected total rate of return : You expect it to pay dividends of $1.00, $1.0660, and $1.1364 in Years 1, 2, and 3, respectively, What is this stock expected total rate of return
Building a safer health system report : What has changed in the industry to reduce medical errors since the To Err is Human: Building a Safer Health System report was published in 1999?
Contrast compensation design and administration : -Compare and contrast compensation design and administration between sales employees, supervisors, managers and executives. How are they distinguished from each
What is the company total amount of common fixed expenses : Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. What is the company total amount of common fixed expense
Requirements of unfair dismissal law : Explain the main requirements of unfair dismissal law in respect of capability and misconduct issues.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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