What should be the current price of the stock

Reference no: EM13878785

Use a risk-free rate of 2% and a market risk premium of 7% for the first 3 problems

A stock with a beta of 2.5 is expected to pay a dividend of $3.20 next year and grow the dividend at 7% per year afterward. What should be the price of this stock?A stock with a beta of 1.1 just paid a dividend of $1.50 expected to grow at 6% indefinitely.What should be the current price of the stock?

What would you expect the price of the stock to be in five years?A stock with a beta of .6 is priced at $68 and just paid a dividend of $1.80. What growth rate does the market expect for this stock?

A stock just paid a dividend of $1.50 expected to grow at 25% per year for the next four years, then a constant rate of 6%. If you require a return of 9%, what is the most you would be willing to pay for this stock?A stock just paid a dividend of $2 that is expected to double each year for the next three years, then grow at a constant rate of 7%. If you require a return of 11%, what is the most you would be willing to pay for the stock today?You find a stock that doesn't currently pay a dividend but has announced that they will pay their first dividend of $7.50 in eight years and grow the dividend at 7%. If you need a 15% return on the stock, how much would you pay for this stock?A stock doesn't currently pay a dividend, but they have announced that they will pay their first dividend in five years at $1.40 per share. You believe the dividend will grow at 5% afterward and you have a required return of 12%. What is the most you would be willing to pay for this stock?

Reference no: EM13878785

Questions Cloud

How would you suggest fair & lovely promote its product : In light of AIDWA's charges, how would you suggest Fair & Lovely promote its product? Discuss. Would your response be different if Fairever continues to use ‘fairness' as a theme of its promotion? Discuss

What is the total rate of return on the bond : Consider a bond paying a coupon rate of 8.75% per year semiannually when the market interest rate is only 3.5% per half-year. The bond has three years until maturity. Find the bond's price today and six months from now after the next coupon is paid. ..

How he can consolidate data to output average-minimum : Michael is a Professor of Biology at DeVry University and has collected "30" largemouth bass from "4" separate lakes to get weight distributions, measure of girth, and length. Given the Professor's needs, summarize how he can consolidate this data to..

Ethical and legal concerns for a health care organization : Ethical and legal concerns for a health care organization

What should be the current price of the stock : A stock with a beta of 2.5 is expected to pay a dividend of $3.20 next year and grow the dividend at 7% per year afterward. What should be the price of this stock?A stock with a beta of 1.1 just paid a dividend of $1.50 expected to grow at 6% indefi..

The use of toxic chemicals in the environment : Write a 5 to 7 pages report on The use of toxic chemicals in the environment, in our food, water and air, in which you need to give answers of following questions

Explain the principal benefits that firms obtain : Prepare flexible budgets for monthly output levels of 55,000 and 65,000 units for the year ended 31 December 2005. Explain the principal benefits that firms obtain from the preparation of flexible budgets.

Select and size a suitable type of machine : Select and size a suitable type of machine with regard to output FAD (free air delivered) and quality of air supply.

User Account

All Pages