User Account

All Pages

What the estimated value of castro stock is closest to

Assignment Help Financial Accounting
Reference no: EM132943344

Castro Inc. is one of the leading competitors of Therma. The analysts at Castro are analyzing the current dividend policy of the entity and reviewing it in the event of any needed amendments.

Castro is expected to pay a dividend of $7/share in 2020, $10/share in 2020 and $12/share in 2022. The share price of Castro on 31st December, 2021 and 31st December, 2022 is expected to be $190 and $220, respectively.

The discount rate applicable to Castro is 15%.

The company has a reported leverage ratio of 2.5 and total assets of $13 million. Net income and sales for the year ended 31st December, 2019 were $850,000 and $6,000,000, respectively.

Problem 1: Assume that it is now the beginning of the year 2022. Using the dividend discount model, the estimated value of Castro's stock is closest to:

A. $184.05/share
B. $201.73/share
C. $166.19/share

Reference no: EM132943344

Questions Cloud

What is the maximum amount wechsler would be willing to pay : Brac costs £9 per pound, and a maximum of 5,000 pounds is available each month. What is the maximum amount Wechsler would be willing to pay
What the estimated value of castro stock at the beginning : What the estimated value of Castro's stock at the beginning of 2020 using the expected share price on December 31, 2022 is closest to
Is conflict on a team always negative and non-productive : Is conflict on a team always negative and non-productive? In addition, how would you approach managing conflict online vs in-person?
Identify specific examples within ideo : Identify specific examples within IDEO to support how the company keeps the culture alive. Then evaluate whether IDEO's culture weak or strong?
What the estimated value of castro stock is closest to : Assume that it is now the beginning of the year 2022. Using the dividend discount model, the estimated value of Castro's stock is closest to
Explain preeminence to free markets and honors : Refer to Author Michael J Sandle book "Justice -Whats the right thing to do"
How much is recorded in ff statement of financial position : The preference shares were selling for P28. How much is recorded in FF's statement of financial position for the preference shares contributed capital
What is the no-arbitrage futures exchange rate : The US 12-month interest rate is 7% per annum, while Australian 12-month interest rate is 3% per annum. What is the no-arbitrage futures exchange rate
What is meant by profit employed in the business : What is meant by "Profit employed in the business"? The account balance was $26,301 million at the start of the year, and the company reported net income

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd