What would be an appropriate estimate of the stock price

Assignment Help Financial Management
Reference no: EM131528781

A company is expected to pay a dividend of $1.36 per share one year from now and $1.97 in two years. You estimate the risk-free rate to be 4.7% per year and the expected market risk premium to be 5.8% per year. Analysts expect the price of the stock to be $53 per share in one year. The beta of the stock is 1.1, and the current price to earnings ratio of the stock is 21. What would be an appropriate estimate of the stock price to be today? (Answer to the nearest penny, i.e. 55.55 but do not use a $ sign).

Reference no: EM131528781

Questions Cloud

The yield to maturity on a bond : The yield to maturity on a bond is __________________ .
What is the profit-maximizing level of price and quantity : What is the profit-maximizing level of price and quantity, faced by this monopolist? What are the primary sources of power for this type of firm?
What is the cost of equity for a firm with a beta : what is the cost of equity for a firm with a beta of 1.5 when the risk-free interest rate is 6% and the expected return on the market portfolio is 15%?
Discuss the generalized compilation-time : 16.9 G. Cardarin and M. Melkan off. "Proving Consistency of Database Transactions." Proc. 5th International Conference on Very Large Data Bases, Rio de Janeiro.
What would be an appropriate estimate of the stock price : What would be an appropriate estimate of the stock price to be today?
What other past information should you collect : Based on this information, what other past information should you collect so that you can be certain that you are complying with the policy
Percent price change due to both duration and convexity : calculate an estimate of the percent price change due to both duration and convexity.
Discuss the case of m m hammer and s k sarin : M. M. Hammer and S. K. Sarin. "Efficient Monitoring of Database Assertions." Proc. 1978 ACM SIGMOD International Conference on Management of Data, Austin.
What would be an estimate of the percent price change : what would be an estimate of the percent price change due to convexity alone?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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