What should be the current share price of headland

Assignment Help Financial Accounting
Reference no: EM132591965

HEADLAND Ltd. had earnings per share of $5 as at December 31, 2015, but paid no dividends. Earnings were expected to grow at 15.5 percent per year for the following five years. HEADLAND Ltd. will start paying dividends for the first time on December 31, 2020, distributing 50 percent of its earnings to shareholders. Earnings growth will be 6 percent per year for the next six years (that is, from January 1, 2021 through to December 31, 2026). Starting on December 31, 2026, HEADLAND Ltd. will begin to pay out 80 percent of its earnings in dividends and earnings growth will stabilize at 2 percent per year in perpetuity.The required rate of return on HEADLAND stock is 10 percent.

Question 1: What should be the current share price of HEADLAND? (Round intermediate calculations to 6 decimal places, e.g. 15.612125 and the final answer to 2 decimal places, e.g. 15.61.)

Reference no: EM132591965

Questions Cloud

Describe the reporting mechanism in your state : Child abuse and maltreatment is not limited to a particular age-it can occur in the infant, toddler, preschool, and school-age years. Choose one of the four.
How determine what is the risk premium : The nominal rate is 9 percent. The inflation premium is 3.0 percent. If the pure rate in the market is 2.3 percent, what is the risk premium?
How calculate the expected return and the standard deviation : How Calculate the expected return and the standard deviation of the portfolio, given a correlation coefficient between Concord and Marigold of 0.35.
How can you differential between the two forms of arthritis : How can you differential between these two forms of Arthritis (Osteo vs. Rheumatoid) and how does the treatment differ? The response must be typed.
What should be the current share price of headland : HEADLAND Ltd. had earnings per share of $5 as at December 31, 2015, What should be the current share price of HEADLAND?
Describe the foundation or project for social good : Describe the foundation or project for social good. Discuss how the foundation reflects the personal values of the celebrity or athlete.
What are your thoughts on musculoskeletal conditions : Musculoskeletal conditions affect the locomotor system and is one of the causes of disability. It is a health dysfunction that affects both young and old.
What is the ratio of their inductances la-lb : Two coils are made using the same length of wire and the same number of turns per length, but coil A has twice as many turns as coil B.
Which alternative should choose for new employer : The second alternative earns 6% for the first year and 10% for the second year. Interest compounds annually. Which alternative should you choose?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Notes receivable and notes payable are short-term

Presented below are a number of balance sheet items for Sage, Inc., for the current year, 2017. Goodwill $ 127,970 Accumulated Depreciation-Equipment $ 292,260 Payroll Taxes Payable 180,561 Inventory 242,770 Bonds payable 302,970 Rent payable (short-..

  What would the first semi annul interest payment

On the first day of its fiscal year, Pedro Dynamite Co. issued $11,000,000 of the five-year, 9% bonds, semiannually. The bonds were issued at an effective rate of 12%, and received proceeds cash of $9,785,645. What would the first semi annul interest..

  Identify how securitization benefits a financial institution

Identify how such a securitization benefits a financial institution and any related risks that may be created through the securitization process

  How to calculate the company debt to assets ratio

How to calculate the company's debt to assets ratio for 2021 and 2022. Sandhill Co. has $1,040,000 in assets and $1,040,000 in stockholders' equity

  Illustrate what are pros and cons related to the change

Describe the structure of GAAP prior to the codification, and after the codification. What are the pros and cons related to the change?

  Briefly discuss when management would tend to favor option

Arg, Inc. developed the following information to help you prepare alternative production budgets for a new. product. For all scenarios, planned starting inventory for the first month s 8,000 units.

  What is? debt? ratio

Rosewood Company had current assets of $562?, current liabilities of $393?, total assets of $772?, and? long-term liabilities of $200. What is? Rosewood's debt? ratio?

  What is the cost of goods sold for julia and company

What is the cost of goods sold for Julia & Company assuming it uses LIFO? (Do not round your intermediate calculations. Round your answer to the nearest)

  Journal entries required to create and close the warranty

Make the Journal entries required to create and close the warranty period

  Define ethical philosopher of your choosing

ethical philosopher of your choosing that we have studied to date, and use both of those philosophies to bolster your decision

  Prepare the journal entry to establish the petty cash fund

Petty Cash: On October 1, 2011, Thomas Trams established a $100 petty cash fund. At the end of October the petty cash fund contained: Cash on hand $3.75 - Petty cash tickets for Entertainment $55.40 Postage 25.80 Miscellaneous items 18.30 Required: P..

  How much total interest will amos pay on this payment plan

Amos could borrow $104,000from its bank to finance the purchase at an annual rate of 8%. Should Amos borrow from the bank or use the manufacturer's payment plan to pay for the equipment?

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