What would an investor pay for a stock

Assignment Help Financial Management

Reference no: EM13809189

What would an investor pay for a stock, if his required rate of return is 12%, the stock next year’s dividend is $3/share, and the dividend is expected to grow at 4%?

Reference no: EM13809189

Questions Cloud

What compound rate is necessary for the money to double : There is a rule of thumb which can be used as an approximation called the Rule of 72 to find interest or period of time, given the other quantity, and it is given as ni=72.If $1 is invested for 10 years, what compound rate is necessary for the money ..

Using the free cash flow valuation model : Free cash flow valuation Nabor Industries is considering going public but is unsure of a fair offering price for the company. Estimate the value of Nabor Industries' entire company by using the free cash flow valuation model. Use your finding in part..

What is the profitability index if the discount rate : The Company X. is currently considering a project that will produce cash inflows of $12,000 a year for three years followed by $6,500 in year four. The cost of the project is $38,000. What is the profitability index if the discount rate is 7 percent?

What would the cash flow diagram look like : If an alternative has an advance payment of $100,000 upon contract award and then quarterly payments of $20,000 for the next 3 years, what would the cash flow diagram look like?

What would an investor pay for a stock : What would an investor pay for a stock, if his required rate of return is 12%, the stock next year’s dividend is $3/share, and the dividend is expected to grow at 4%?

What will be the new beta of the portfolio : You hold a diversified portfolio consisting of many different common stocks with a total market value of $100,000. The portfolio beta is equal to 1.15. You have decided to sell one of your stocks, a lead mining stock whose beta is equal to 0.7 , for ..

Maximizing shareholder wealth and never paying bribes : Is there a conflict between maximizing shareholder wealth and never paying bribes when doing business abroad? If so, how might you explain the firm's position to shareholders asking why the company does not pay bribes when its foreign competitors in ..

Arithmetic and geometric returns for the stock : A stock has had returns of −18.8 percent, 28.8 percent, 21.6 percent, −9.9 percent, 34.6 percent, and 26.8 percent over the last six years. What are the arithmetic and geometric returns for the stock?

Explain the importance of pareto improvement : A public project produces the following individual benefits for stakeholders stated in terms of present values when an appropriate social discount rate of 15% is used: Al = $16,000; Bev = $25,000; and Chris = $17,000. Explain the importance of Pareto..

User Account

All Pages