Would you recommend to buy or sell the stocks

Assignment Help Finance Basics
Reference no: EM132494938

The risk-free rate is 8% and the expected return on the market is 14%. As an analyst, you are preparing a recommendation report on the following two stocks:

Stock S Stock B

Beta 0.85 1.35

Expected dividend next year $1.10 $4.00

Growth rate (g) 8% 6%

Current Price (p0) $22 $30.77

-Would you recommend to buy or sell the stocks? Explain. 

-At what prices will you change your decision from either "buy" or "sell" to "hold"?

Reference no: EM132494938

Questions Cloud

Compute the after-tax cost of capital to dayton : The bonds would mature in 15 years, and the coupon interest rate is 10%. Compute the after-tax cost of capital to Dayton for bonds
Compute the cost of capital of the stock to firm : The dividend rate is 12%, and the par value of the stock is $100. Compute the cost of capital of the stock to your firm. Show all work.
What are the effects that errors will have in over : As of December 31, the merchandise had not yet been received by Beta. Alpha recorded the sale and counted the merchanise in ending inventory
What is the planned level of activity : The company has the margin of safety of $64000 expressed in terms of sales value. What is the planned level of activity (in units) for next month
Would you recommend to buy or sell the stocks : The risk-free rate is 8% and the expected return on the market is 14%. As an analyst, you are preparing a recommendation report on the following two stocks:
Find the abbott laboratories balance sheet : Find the ABT Balance Sheet and Income Statement information. using Abbott Laboratories (ABT) most recent Annual Report (10-K)
What is the expected return and standard deviation : What is the expected return and standard deviation of the portfolio if we hold 40% of Stock K and 60% of stock L?
Prepare stockholder journal entries for initial transaction : Steinbeck company lent $82.645 to Hemingway Inc. accepting Hemingway's 2 years $100000, Prepare stockholder journal entries for initial transaction
What is the expected range of prices : If the price of stock is currently $50, what is the expected range of prices using a 99% level of confidence?

Reviews

Write a Review

Finance Basics Questions & Answers

  Plot given data in a chart

Plot this data in a chart. Are any cycles apparent in your chart? -  Detrend the data by creating an oscillator that is constructed using a ratio of the current close to the 11-day SMA.

  Find the component cost of common stock

Assuming that the company will not issue additional common stock share, find the component cost of Common Stock (assuming dcf)

  How does a floating exchange rate system work

What were the specific reasons why the gold standard was eliminated? How does a floating exchange rate system work? What is managed float or a managed floating exchange rate system?

  What is meant by the phrase public good

What is meant by the phrase "Public Good" as it relates to the ethics of higher education? Define philanthropy and moral agents in the context of fundraising.

  Which of the adjusting entries below is correct

Which of the adjusting entries below is correct if Company X expects that 0.5% of its $1,000,000 of net credit sales for this year will not be collectible

  During this tax year company is liable to pay tax 35

xyz a telecom company has the following capital structurewhich is considered to be optimaldebentures 20preferred stock

  Currency translation adjustment and contributions to an

in 1999 pfizer had 9000 million shares of common stock authorized 4260 million in issue and 3847 million outstanding

  What is the 2009 operating cash flow\

Jetson Spacecraft Corp. shows the following information on its 2009 income statement: sales = $209,000; costs = $103,000; other expenses = $5,700; depreciation expense = $9,000; interest expense = $14,200.

  Advertising technologies inc ati specializes in providing

advertising technologies inc. ati specializes in providing both published and online advertising services for the

  Briefly explain each of the line items on income statement

Explain what must have happened at Danone in 2007 that boosted net income by so much, and comment on possible implications for Danone's future.

  Explain why an options time value is greatest

Explain why an option's time value is greatest when the stock price is near the exercise price and why it nearly disappears when the option is deep-in- or out-of-the-money?

  Required rate of return on groningen stock

One year from today, investors anticipate that Groningen Distilleries, Inc., stock will pay a dividend of $3.25 per share.

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