What is your estimate of the stock current price

Assignment Help Financial Management

Reference no: EM131511563

A company currently pays a dividend of $1.75 per share (D0 = $1.75). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 6.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Round your answer to the nearest cent.

Reference no: EM131511563

Questions Cloud

Who has covered interest arbitrage opportunity : Interest rates 2% lower in the U.S. than in foreign country. The foreign currency exhibits 3% forward discount. Who has covered interest arbitrage opportunity?

What is nominal interest rate seven year treasury security : What is the nominal interest rate on a 7-year Treasury security?

Estimated required rate of return on woidtkes stock : What is the estimated required rate of return on Woidtke's stock?

What amount must you deposit each year : If the account pays 4.5%, what amount must you deposit each year?

What is your estimate of the stock current price : What is your estimate of the stock's current price?

What does the market believe will be the stocks price : what does the market believe will be the stock's price at the end of 3 years at the end of 3 years (i.e., what is Ps)?

Assume the market is in equilibrium with required return : Assume the market is in equilibrium with the required return equal to the expected return. What is your forecast of g?

Preferred stock valuation : What is the estimated value of Rolen's preferred stock? What would be the new estimated value of Rolen's preferred stock?

Bank account to cover college expenses : you want to be able to withdraw $1,000 each quarter from your bank account to cover college expenses over the next 4 years.

User Account

All Pages