What would be your valuation of hayden ltd shares

Assignment Help Financial Management
Reference no: EM132024316

Hayden Ltd intends to make its first dividend payment 4 years(s) from now. It then intends to pay dividends annually thereafter. The company has announced it expects the first three dividends to all be of the magnitude of around 5 cents per share. Subsequent dividends will then be paid out at a set rate of 50% of earnings. Your earnings forecasts for this coming year suggest that $0.20 Earnings per Share (EPS) is the most likely outcome. You are then forecasting EPS growth of around 2% p.a. in perpetuity. What would be your valuation of Hayden Ltd's shares, given you require a 15% p.a. return?

State your answer in dollars to THREE decimal places.

Reference no: EM132024316

Questions Cloud

Actual economic rate of return based on fisher effect : If the expected inflation rate for the next year is 1.4%, what is the expected actual economic rate of return based on the Fisher effect?
Calculate the deadline for the us treasury bills : Calculate the deadline for the following U.S. Treasury bills. Although the bill was originally issued for a period of five years,
What is the current value of these bank bills : If the current 180-day bill rate is 4.5% p.a., what is the current value of these bank bills?
What is the cash price of the bonds to the nearest dollar : what is the cash price of the bonds to the nearest dollar?
What would be your valuation of hayden ltd shares : You are then forecasting EPS growth of around 2% p.a. in perpetuity. What would be your valuation of Hayden Ltd's shares, given you require a 15% p.a. return?
Government bond that pays interest semi-annually : Calculate the price of a 5-year $100,000 8% government bond that pays interest semi-annually, if the required market yield is 6% p.a. compounding semi-annually.
What is the standard deviation and expected return : What is the expected return? What is the variance? What is the standard deviation?
Find the current yield-capital gains yield and total return : Find the current yield, capital gains yield, and total return on January 1, 1997, given the price as determined in Part b.
What must the coupon rate be on bonds : The bonds make semiannual payments. What must the coupon rate be on the bonds?

Reviews

Write a Review

Financial Management Questions & Answers

  Annual cash flow and the project terminal cash flow

Calculate the total year 10 net cash flow, including both the last annual cash flow and the project's terminal cash flow.

  Murphys brewhouse was a rapidly expanding chain

Murphy's Brewhouse was a rapidly expanding chain of home-brew bars.- If you require a 20 percent rate of return on investments of this perceived risk level, should you buy these debentures?

  Does financial account balance equal net financial deal

How do these following categorize into long-run or short-run: Direct foreign investment, Portfolio investment, Financial derivative and other investment ?

  Issue dividends to their shareholders

Growth technology companies typically do not issue dividends to their shareholders.

  Put option and sell the corresponding call option

You buy a 1-year put option and sell the corresponding call option.

  Calculate the line loss ratio-expense ratio-dividend rate

Calculate the line’s loss ratio, expense ratio, dividend ratio, combined ratio (after dividends), investment ratio, operating ratio, and overall profitability.

  Is the american retail banking industry attractive

Is the American retail banking industry attractive?

  Estimate the cost of equity capital

Which of the following is an assumption in applying the capital asset pricing model (CAPM) to estimate the cost of equity capital?

  Compute the future value in year

Compute the future value in year 9 of a $3,300 deposit in year 1, and another $2,800 deposit at the end of year 5 using a 9 percent interest rate.

  How would you define pluralism

How would you define pluralism? Write a 1page essay on pluralism, concentrating on religion and religious oppression.

  The put-call parity-would be the price of call option

Suppose the price of a share XYZ is 100 at t=0. At t=1, the share-price either increases to 108 or decreases to 88. At t=2, the share-price will either be 120, or 96 (if the share goes up at t=1 and goes down at t=2 and if it goes down at t=1 and goe..

  What is the required rate of return

Fee Founders has perpetual preferred stock outstanding that sells for $34.00 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

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