What price would you expect to pay for a stock

Assignment Help Financial Management
Reference no: EM13971888

What price would you expect to pay for a stock with a 13% required rate of return, 4% constant rate of dividend growth, and an annual dividend of $2.50 that was paid today?

Reference no: EM13971888

Questions Cloud

Return on your investments in retirement : You want to know in which scenario you need to save the LEAST amount of money monthly. First plan is to have $1,250,000 in 25 years when you retire and your investments will earn 9%. The second option is to receive a monthly payment of $6,000 in reti..
Savings account : John Vincent invested 10,000 in a savings account. The account pays 4.5% annual interest. john will have how much in the account at the end of 10 years? Round to the nearest dollar
What will be the present worth of the money in your account : Assume that you open a savings account that accrues 3% nominal annual interest that is compounded monthly. Initially, your account has no funds in it. Starting next month, you add $50 / month for 6 months. Then, you increase your monthly deposit by $..
How much interest is paid on the loan in first month payment : A company takes out a loan for $150,000 at a nominal interest rate of 8% compounded monthly. The company agrees to pay back the loan in equal monthly payments for 15 years. What is the monthly payment for this loan? How much interest is paid on the l..
What price would you expect to pay for a stock : What price would you expect to pay for a stock with a 13% required rate of return, 4% constant rate of dividend growth, and an annual dividend of $2.50 that was paid today?
Take care of the maintenance of the equipment : A contractor estimates that maintenance on a new piece of equipment will be $275 for the first month and it will increase by 0.5% each month afterwards. However, the contractor is offered a service contract that would maintain the equipment for a tot..
What is an estimate of the price of the stock : ABC Co. presently does not pay a dividend, but is expected to pay a dividend in year 3 of $.75 and the dividend then will increase at a constant rate of 5% annually. The rate of return is 10%. What is an estimate of the price of the stock today?
What would be the expected price of a stock : What would be the expected price of a stock when dividends are expected to grow at a 25% rate for each of the next three years, then grow at a constant rate of 5%, if the stock's required rate of return is 13% and next year's dividend will be $4.00?
Calculate the current yield for the bond : Calculate the current yield for the following bond – a 15 year corporate bond issued 4 years ago with a 5% coupon rate and similar bonds today have 4% coupon rates. Calculate the YTM for the following corporate bond – 6% coupon, 8 years left to matur..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the tax liability-corperate tax rates

Pearls Inc had sales in 2013 of 2.1 Million. The common stock holders recieved 600,000 in cash dividends. Interest totaling 150,000 was paid on outstanding debts. Operating expenses totaled 300,000, and COGS was 500,000. What is the tax liability of ..

  About publically traded health care organizations

publically traded health care organizations

  Elaborate revenue cycle management

What do you mean by horizontal and vertical analysis of financial statements? Discuss the categories of Ratios with the help of suitable example. Explain the concept of working capital. Discuss the working capital management strategies. Elaborate Rev..

  Decided to restructure firm and become more market-oriented

Your company president has decided to restructure the firm and become more market-oriented. She is going to announce the changes at an upcoming meeting. She has asked you to prepare a short speech outlining the general reasons for the new company ori..

  What are the three primary parts of the efficiency ratio

Describe why the efficiency ratio is a meaningful measure of cost control. Describe why it may not accurately measure cost control. What are the three primary parts of the efficiency ratio? Are there any trade offs among these three components? Expla..

  Growth stocks outperform value stocks

Even though no final conclusion is currently warranted, a number of research papers, including those of Fama and French, have argued that: there is no noticeable difference in the returns of growth versus value stocks. growth stocks outperform value ..

  About a firms cost of debt

Which of the following is generally true about a firm's cost of debt?

  Determine the cost of the cash discounts to warren

Warren Motor Company sells $30 million of its products to wholesalers on terms of "net 30." Currently, the firm's average collection period is 48 days. In an effort to speed up the collection of receivables, Warren is considering offering a cash disc..

  Common stock is currently selling

Greens Company’s common stock is currently selling for $66 per share. Last year, the company paid dividends of $3.45 per share The projected growth rate of dividends for this stock is 3.56 percent. Which rate of return does the investor expect to rec..

  What is the projects net present value if the required rate

A project is expected to create operating cash flows of $33,000 a year for three years. The initial cost of the fixed assets is $68,000. These assets will be worthless at the end of the project. An additional $4,500 of net working capital will be req..

  What is standard deviation of rate of return on investment

A project has a .7 chance of doubling your investment in a year and a .3 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

  Insurance coverage

Becky Fenton has 25/50/10 automobile insurance coverage. If two other people are awarded $45,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover?

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