What should the stock price be after three years

Assignment Help Financial Management
Reference no: EM131986711

Saks is expected to pay a dividend in year one of 1.95, a dividend in year 2 of 2.27, and a dividend in year 3 of 2.84. After year 3, dividends are expected to grow at the rate of 8% per year. An appropriate rate of return for the stock is 11% What should the stock's price be after 3 years? (Round to 4 decimal places)

Reference no: EM131986711

Questions Cloud

What is after-tax salvage value-compute the npv and irr : Compute EBIT for each year. What is the EBIT in years 1 through 6? Tax rate is 40%. What is the after-tax salvage value? Compute the NPV and IRR.
What is the current fair price of the stock : What is the current fair price of the stock? Suppose the stock is selling at this price, but then investors revise their expectations.
How long will it take you to pay off the? loan : You have an outstanding student loan with required payments of $ 550 per month for the next four years. How long will it take you to pay off the? loan? ?
What is the first payment due one month from now : What is the annual payment? what is the first payment due one month from now ?
What should the stock price be after three years : An appropriate rate of return for the stock is 11% What should the stock's price be after 3 years?
Considering new project that will require external financing : A firm is considering a new project that will require external financing. what discount rate should the firm use.
Government bonds are considered to be risk-free assets : Government bonds are considered to be 'risk-free' assets. Why, then, do they pay a return? Are they truly completely free of risk?
What will be the cash flows for the project : What will be the cash flows for the project?
What is the amount of this year dividend paid last week : The market rate of return on this stock is 14.6 percent. What is the amount of this year's dividend paid last week?

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare all journal entries by rothschild chair company

Prepare all journal entries by Rothschild Chair Company, Inc., to record the restructuring and any remaining transactions relating to the debt.

  How do shares disappear from the stock exchange

What are the institutional mechanisms by which funds disappear from the public financial markets back into the pockets of investors?

  Calculate the deadweight loss of given tax

Calculate the deadweight loss of this tax when: -  Supply of stuffed rabbits is Q = 400., - Supply of stuffed rabbits is Q = 12P.

  Effects of intervention on import expenses

Hull Importing Company is a U.S.-based firm that imports small gift items and sells them to retail gift shops across the United States.

  What is the bond yield to maturity

Analyze the 10-year, 8% coupon rate (semi-annual payment), $1,000 par value bond. The bond currently sells for $1,318. What’s the bond’s yield to maturity?

  Starbucks decision from a capital budgeting outline

Discuss the recent acquisition, the probable growth of the tea industry and Starbucks’ decision from a capital budgeting outline.

  Firm weighted average cost of capital

Wayco Industrial Supply has a pre-tax cost of debt of 7.6 percent, a cost of equity 14.3 percent, and a cost of preferred stock of 8.5 percent. The company's tax rate is 37 percent. What is the firm's weighted average cost of capital?

  Limit-order book for share of stock

Consider the following limit-order book for a share of stock. The last trade in the stock occurred at a price of $55. Limit Buy Orders Limit Sell Orders Price Shares Price Shares $ 54.75 500 $ 55.25 200 54.50 400 55.50 200 54.25 500 58.75 300 54.00 2..

  Calculate the nrt present value and profitability index

Calculate the nrt present value (NPV), profitability index (PI), and internal rate of return (IRR) for this project.

  A mortgage bond is secured by a lien on real property

The formula for calculating the present value (PV) of a perpetuity is PV = PP/(1 + i), where PP is the perpetuity payment and i is the discount rate. Common stock represents ownership of the firm. A mortgage bond is secured by a lien on real property..

  Futures contract is on the same underlying security

Compute the price of an American put option with strike K=110 and maturity T=.25 years. Compute the fair value of an American call option with strike K=110 and maturity n=10 periods where the option is written on a futures contract that expires after..

  The risk free rate on a continuously compounded basis

Stock ABC is trading for $50. The stock has a standard deviation on an annual basis of 20%. The risk free rate on a continuously compounded basis is 5%. What is the price of a call that expires in 26 days and has a strike price of 50? If the put was ..

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