What will the company dividend be in seven years

Reference no: EM133207602

Assignment - Interest Rates and Stock Valuation Paper

A) Four years ago, Bling Diamond, Inc., paid a dividend of $1.65 per share. The company paid a dividend of $2.10 per share yesterday. Dividends will grow over the next five years at the same rate they grew over the last four years. Thereafter, dividends will grow at 5% per year.

What will the company's dividend be in seven years?

Based on the dividend growth model, what are the two components of the total return on a share of stock? Which do you think is typically larger?

B) The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, it is a "golden opportunity." The mine will cost $3,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $575,000 at the end of the first year, and the cash inflows are projected to grow at 8% per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $450,000 at the end of Year 11.

What is the IRR for the gold mine?

The Utah Mining Corporation requires a return of 13% on such projects. Should the mine be opened?

Reference no: EM133207602

Questions Cloud

Discuss which technique you find more helpful : Discuss technique you find more helpful incorporating the example - example at my work is when we go step by step on how to use specific portions

Why does it matter how we define interest group : 1. Are interest groups good or bad for democracy? Defend and explain your answer. H group system?

Explain the handling a guidance situation : You are outside on the playground with the children. You observe another staff member inappropriately handling a guidance situation. The other staff member is y

How eating complex carbohydrates and protein is better : Discuss how eating complex carbohydrates and protein is better for your body's metabolism and a more efficient way to create ATP.

What will the company dividend be in seven years : Four years ago, Bling Diamond, Inc., paid a dividend of $1.65 per share. The company paid a dividend of $2.10 per share yesterday. What will company dividend

Develop a workplace accommodations letter : Develop a Workplace Accommodations letter that could be sent to your Employer requesting the ability for you to continue working from home due to Long COVID Sym

How do scientists decide whats right and wrong : How do scientists decide what's right and wrong? Who modifies the vision of gravity that we had been passed down since Newton?

Analyze the effect of an irrevocable trust on the gift tax : Assignment - Tax-Planning Client Letter Essay - Analyze the effect of an irrevocable trust on the gift tax and future estate taxes

Relate the plain joint and the acromioclavicular joint : 1. Apply comprehension you might interpret the term caves to make sense of the idea of the limit of the bones and lattice

User Account

All Pages