What should the share price be in one year

Assignment Help Financial Management
Reference no: EM132069113

A share of stock sells for $35 today. The beta of the stock is 1.2, and the expected return on the market is 12 percent. The stock is expected to pay a divdend of .$.80 in one year. If the risk-free rate is 5.5 percent, what should the share price be in one year?

Reference no: EM132069113

Questions Cloud

What is the research design : What is the research design? What are the key factors that lead you to select this research design?
Two production functions : Determine which statement is true in regards to the two production functions shown below:
What are the strengths and limitations of research results : How do the research results and statistical findings in the article apply to your research question and your applied setting?
Guidelines for choosing the right java collection : When writing a data structure what should be our guidelines for choosing the right Java Collection?
What should the share price be in one year : The stock is expected to pay a divdend of .$.80 in one year. If the risk-free rate is 5.5 percent, what should the share price be in one year?
Various domains of a typical it infrastructure : Analyze how security policies help mitigate risks and support business processes in various domains of a typical IT infrastructure.
Contracts needed to change the duration of bond portfolio : Should he enter a long or a short futures position? Calculate the number of contracts needed to change the duration of the bond portfolio.
What is a way you might use powershell : What is a way you might use PowerShell? How can it help with adding roles for a server?
Programming tools and secure programming a concern : Why are computerized programming tools and secure programming a concern in the business environment.

Reviews

Write a Review

Financial Management Questions & Answers

  What is company operating cash flow

What is the company's operating cash flow?

  Market-to-book ratio of each of these clothing retailers

In mid-2012, Abercrombie & Fitch (ANF) had book equity of $1693 million, a price per share of $35.48, and 82.55 million shares outstanding. At the same time, The Gap (GPS) had a book equity of $3017, a share price of $27.90, and 489.22 million shares..

  More volatility in cash flow and therefore price volatiilty

An issuer is trying to structure a floating rate tranche in a CMO offering. The tranche will be backed by mortgages with 8% interest rate and current balance of $2000000. Interest payable to investors in the floating rate securities (F) and investors..

  Favourite art museum by establishing funds

A wealthy art collector has decided to endow her favourite art museum by establishing funds for an endowment which would provide it with $1,000,000 per year for acquisitions into perpetuity. The art collector will give the endowment upon her fiftieth..

  Portfolio of investment in two stocks

You own a portfolio of investment in two stocks, A and B. Total investment in stock A is valued at $6,500 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. Total investment in stock B is $3,500. What is the ex..

  The organization pension fund management division

Mutual of Seattle Group Health Cooperative and co-directors of the organization's pension fund management division.

  Dividends are expected to grow at rate

Red-Blue Co. is growing quickly. Dividends are expected to grow at a rate of 24% for the next three years, with the growth rate falling off to the constant 6% per year indefinitely. If the required return is 11%, and the company just paid a dividend ..

  Example of when the underlying circumstances are favorable

Consider each of the following situations independently of each other. For each of the situations, provide one example of when the underlying circumstances may be such that the observed trend is unfavorable, and one example of when the underlying cir..

  Incremental sales is associated with introducing new pizza

Assume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza?

  About the macaulay duration

You find a bond with 8 years until maturity that has a coupon rate of 7 percent and a yield to maturity of 7 percent. What is the Macaulay duration?

  Financial services modernization act

In 1999 the Financial Services Modernization Act (also known as the Gramm-Leach-Bliley Act) was passed and the Glass-Steagall Act was repealed.

  Analyst is evaluating securities in a developing nation

An analyst is evaluating securities in a developing nation where the inflation rate is very high. As a result, the analyst has been warned not to ignore the cross-product between the real rate and inflation. If the real risk-free rate is 6.3% and inf..

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