What was the share price at the start

Assignment Help Accounting Basics
Reference no: EM132994937

Question - In 2017 and 2018, ThinkThank paid a dividend of $1.05 and $1.20 per share respectively. At the start of 2019, the company expected dividends to keep growing at this rate, and had a required rate of return of 12%. What was the share price at the start of 2019? (assume dividends were paid at the end of each year). Enter your answer in dollars to 2 decimal places.

It is now mid-2021 and the economic downturn has impacted the company negatively. Consequently, the company has not been able to pay any dividends since 2018 and is not expected to pay any for the foreseeable future. What is another method (to the dividend discount model) that we can use to estimate share prices? Explain.

Reference no: EM132994937

Questions Cloud

Identify three inherent risks to be considered : Identify three inherent risks to be considered in planning the audit of Continental Limited for the year ended 31 December 2020
What do think will be the economic impact on oil prices : What do you think will be the economic impact on oil prices if the Organization of Petroleum Exporting Counties (OPEC) reduced or cut back production?
Why is ivory coast facing economic instability : How do you think the economic issue in this western African nation will affect neighboring countries and the entire continent as a whole?
Calculate the effective interest rate : Cassandra invested $225,000 to purchase a home. After 9 years, she sold the home for $300,000. Calculate the effective interest rate earned on this investment
What was the share price at the start : The company expected dividends to keep growing at this rate, and had a required rate of return of 12%. What was the share price at the start of 2019
Explain the opportunity cost sony faces : Explain when coping with scarcity during the current CO-19 pandemic and the tradeoffs we all must make. Explain the opportunity cost Sony faces
What is the total operating income variance : What is the total operating income variance for August 2019? (b) What is the total flexible-budget variance for the month
What amount will spencer company report : What amount will Spencer Company report as depreciation expense over the 8-year life of the equipment using straight-line depreciation
What is the stock value : Currently a stock pays a dividend per share of $43.37. The levered cost of equity capital for the firm is 13.4% per year. What is the stock's value

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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