What should be the market price of common stock

Assignment Help Financial Management

Reference no: EM131551562

ABC, Inc. is expected to pay a dividend of $3.15 per share next year, and this dividend is expected to grow at a 5% rate annually forever thereafter. Given the risk level of the stock, investors require a 12% return. What should be the market price of ABC Inc.’s common stock?

$25.00

$26.25

$42.86

$45.00

None of the answers are correct.

Reference no: EM131551562

Questions Cloud

Average investment in accounts receivable : What is the average investment in accounts receivable as shown on the balance sheet?

Company disbursement float-net float and collection float : Calculate the company’s disbursement float, collection float, and net float.

Debt and cost of common equity : Empire Electric Company (EEC) uses only debt and common equity. What is its cost of common equity?

Total amount of dividend income to date from the investment : What is the total amount of dividend income to date from the investment?

What should be the market price of common stock : What should be the market price of ABC Inc.’s common stock? $25.00

Balance in the retained earnings account be after dividend : What will the balance in the retained earnings account be after the dividend?

What is the amount of the company accounts receivable : Will this change in policy increase or decrease accounts receivable? What is the amount of the company’s accounts receivable?

What is length of the cash cycle : Wilson,Inc. has an inventory turnover rate of 14, What is the length of the cash cycle?

What is average daily float : In a typical month, the Gulley Corporation receives 100 checks totaling $90,000. What is the average daily float?

User Account

All Pages