What is your estimate of the stock current price

Assignment Help Operation Management

Reference no: EM131117477

A company currently pays a dividend of $3.5 per share (D0 = $3.5). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, then at a constant rate of 8% thereafter. The company's stock has a beta of 1.5, the risk-free rate is 6%, and the market risk premium is 3%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM131117477

Questions Cloud

Financial incentives to attract business : A paper giving your thoughts and reasoning on whether cities and states using financial incentives to attract business is ultimately a win or a lose situation for these governmental units.

Explain four governmental expenditures that you believe : Discuss four governmental expenditures that you believe will have a significant impact on the national economy. Justify your response with examples.

Explain the type of pressure that these factors placed : In the 1990s, Russia was attempting to import more goods but had little to offer other countries in terms of potential exports. In addition, Russia’s inflation rate was high. Explain the type of pressure that these factors placed on the Russian curre..

Million research and development project : Hemmingway, Inc., is considering a $5 million research and development (R&D) project. Profit projections appear promising, but Hemmingway's president is concerned because the probability that the R&D project will be successful is only 0.50.

What is your estimate of the stock current price : A company currently pays a dividend of $3.5 per share (D0 = $3.5). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, then at a constant rate of 8% thereafter. The company's stock has a beta of 1.5, ..

Discuss government program that impact federal spending : From the first e-Activity, discuss three major government programs that impact federal spending and whether any of the programs can be realistically cut. Justify your response with examples.

The dna of the supply chain : Q4. In today's customer-driven market, an effective supply chain needs to be responsive to requests from internal and external customers. Who are these internal and external customers? How are their needs different from each other?

Indicate the gross profit percentage in terms of sales : Gross Profit Method Each of the following gross profit percentages is expressed in terms of cost.

Explain why the value of the british pound against dollor : Explain why the value of the British pound against the dollar will not always move in tandem with the value of the euro against the dollar.

User Account

All Pages