What price do you forecast for the stock next year

Assignment Help Financial Management
Reference no: EM131983825

Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 10% per year.

a. If r = 20% and DIV1 = $6, what is the value of a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What price do you forecast for the stock next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What rate of return should you expect if you buy the stock today and sell it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Reference no: EM131983825

Questions Cloud

The implied value of the firm growth opportunities : If earnings are $3.60 a share, what is the implied value of the firm’s growth opportunities?
Capital structure will there be change in cost of debt : After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt?
What are the dividend payout ratios for each firm : What are the dividend payout ratios for each firm? What are the expected dividend growth rates for each firm?
Determine marginal cost of capital : The Nolan Corporation finds it is necessary to determine its marginal cost of capital. What is the initial weighted average cost of capital?
What price do you forecast for the stock next year : If r = 20% and DIV1 = $6, what is the value of a share? What price do you forecast for the stock next year?
What must be the rate of return earned by the firm : What must be the rate of return earned by the firm on its new investments?
Trend-line-what part of value is due to growth opportunities : If the market expects a 10% rate of return on Trend-Line, at what price must it be selling? what part of its value is due to growth opportunities?
Cost of capital for use in making capital budgeting decision : A-Rod Manufacturing Company is trying to calculate its cost of capital for use in making a capital budgeting decision. Compute the historical growth rate.
Calculate the market value weights for debt and equity : Calculate the market value weights for debt and equity. What is the WACC for AutoZone?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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