What should be the current price per share of common stock

Reference no: EM132959311

Question: Motor Homes Inc. (MHI) is presently in a stage of abnormally high growth because of a surge in the demand for motor homes. The company expects earnings and dividends to grow at a rate of 20 percent for the next 4 years, after which time there will be no growth (g = 0) in earnings and dividends.

The company's last dividend was $1.50. MHI's beta is 1.6, the return on the market is currently 12.75 percent, and the risk-free rate is 4 percent. What should be the current price per share of common stock?

Reference no: EM132959311

Questions Cloud

Position of leadership in a change effort : With a critical reflection on how to lead an organizational change effort successfully. Considering new knowledge and experience questions.

What is federalism : What is federalism? Taking the issue of Sanctuary Cities- Should State and Local Government be compelled comply with Federal Decrees concerning illegal immigrat

Interview and selection program to avoid legal implications : 1) TCI, a software company in California, was recently sued by two applicants who claimed that they were discriminated against in the interview process. TCI rec

Discuss who be responsible for materials price variance : Discuss who might be responsible for the materials price variance, the materials quantity variance and the labour efficiency variance.

What should be the current price per share of common stock : the return on the market is currently 12.75 percent, Risk-free rate is 4 percent. What should be the current price per share of common stock?

Find what amount should ultra report as cost of goods sold : Ultra Co. uses a periodic inventory system. What amount should Ultra report as cost of goods sold on its income statement for the month of January?

Examples of alternative hr strategies to downsizing : Provide two examples of alternative HR strategies to downsizing

Relationship between the history and evolution : Examine and explain the relationship between the history and evolution of EEO laws,

Explain how glenelg accounting services should recognise : Explain how Glenelg Accounting Services should recognise this event, justifying your answer by reference to relevant conceptual framework definitions

User Account

All Pages