What should be the present price of the mgc stock

Assignment Help Finance Basics
Reference no: EM132525455

1. The MGC Company just paid $6 dividend per share and it expects for each of the next four years a high annual growth of 60%. Thereafter it will continue growing at the constant long-run rate of 5% annually.

What's your prediction for the stock price in four years from now assuming a required annual return of 15%?

a. 412.88
b. 398.73
c. 501.33
d. 489.22

2. What should be the present price of the MGC stock?

a. 238.33
b. 327.29
c. 292.83
d. 306.99

3. The CGY for the first years, of the above stock, is expected to be

a. 10.023%
b. 3.430%
c. 13.237%
d. 11.722%

Reference no: EM132525455

Questions Cloud

What are the values of the ccc and r : Premier Health System is just about to launch operations of a new oncology center. The oncology center will have book assets of $10 million, and it expects to e
Call option on bonds with a notional value : Assume a bank has bought a call option on bonds with a notional value of $200. Further assume that the delta of the option is calculated at 0.45
Find the present value of due in the future : Find the present value of $725 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the neare
What will be the value of premier if it uses no debt : Premier Health System is just about to launch operations of a new oncology center. The oncology center will have book assets of $10 million
What should be the present price of the mgc stock : The MGC Company just paid $6 dividend per share and it expects for each of the next four years a high annual growth of 60%. Thereafter it will continue
What is the contingent asset value : Assume a bank has bought a call option on bonds with a notional value of $200. Further assume that the delta of the option is calculated at 0.45 and a beta of 2
What are the free cash flows of the? project : a. What are the free cash flows of the? project? b. If the cost of capital is 15%?, what is the NPV of the? project?
Opportunity cost of capital : While you are at it, also explain the following statement: "The opportunity cost of capital depends on the proposed use of cash, not the source of financing."
Bank charges a back-end fee : If the bank charges a back-end fee of 0.5%, what is the additional revenue the bank would generate?

Reviews

Write a Review

Finance Basics Questions & Answers

  Prepare a projected income statement

Assume that company management expects sales growth of 8 percent during 2009, and during 2009 expects stable relationships between net income and sales, sales and total assets, and debt/equity. Prepare a projected income statement and balance shee..

  Compute the holding period return

In an effort to track the local economy Finance 327 has decided to create a San Diego stock market index. The index will be made up of four local stocks Sempra Energy.

  Te bonds mature in 11 years and have 1000 face value

bonds issued by stainless tubs bear an 8 coupon rate payable semiannually. the bonds mature in 11 years and have a

  A 1 million bond issue is outstanding assume deposits earn

a 1 million bond issue is outstanding. assume deposits earn 8 percent per annum. calculate the amount to be deposited

  Improve the persuasiveness of work

Finally, what could the author have done to improve the persuasiveness of his work? Be sure you properly cite the source article or story.

  Budgeting for operating and maintenance costs of capital

Discuss two to three (2-3) actions an administrator should review consistently to alleviate over budgeting for operating and maintenance costs of a capital

  Draw the household bid-rent function

The classic monocentric city model assumes that all commuting is into the city center. Consider a two-person household in which one person commutes.

  Cpe may storages ending inventory was 484000 which was

cape may storages ending inventory was 484000 which was approximately the average inventory level for the year cost of

  How much money is expected to be collected in october

A company collects 25% of its sales during the month of sale, 65% one month after the sale, and 10% two months after the sale. The company expects sales of $50,000 in August, $80,000 in September, $90,000 in October, and $60,000 in November. How m..

  What was the investor return

An investor buys a stock for $80, and one year later receives a $5 dividend and sells the stock for $79. What was the investor's return?

  Return on foreign investment

An investor in the USA bought a one-year Singapore security valued at 200,000 Singapore dollars. The US dollar equivalent was $100,000. The Singapore security earned 15 percent during the year

  What is the addition to retained earnings

Shelton, Inc., has sales of $393,000, costs of $181,000, depreciation expense of $46,000, interest expense of $27,000, and a tax rate of 30 percent. (Do not round intermediate calculations.)

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