Determine the dividend yield and current stock price, Microeconomics

Assignment Help:

The Bloomington Electric Company operates in a stable industry and therefore has predictable dividend growth of 8% per year. The most recent annual dividend was paid yesterday in the amount of $4. Assume the appropriate discount rate is 15%.

a. what is the current stock price?

b. Assuming the annual growth rates for the next three years is 20% each year; but starting the fourth year and after the growth rate remains constant at 8%. What is the current stock price under this scenario?

c. Assuming a dividend growth rate of 8%, what is the dividend yield of this stock if the current stock price is $40?


Related Discussions:- Determine the dividend yield and current stock price

Use a ppf to explain the trade-offs that all economies face, Use a PPF to e...

Use a PPF to explain the trade-offs that all economies face. All countries must construct some sort of system whereby output, allocation and distribution of goods is decided.

#titlwhat is the second best?, what is the second best?prove the theorem wi...

what is the second best?prove the theorem with the help of a diagram?

Calculate price and average total cost atc, 1. Through graphs describe the ...

1. Through graphs describe the relationship between the price, P , and the average total cost, ATC , for a firm in perfect competition when it earns an economic profit; earns a n

Demand analysis, all information about demand analysis

all information about demand analysis

Direct utility, what is direct utility in micro economics?

what is direct utility in micro economics?

Estimating and predicting cost, Estimating and Predicting Cost * Estima...

Estimating and Predicting Cost * Estimates of future costs can be obtained from a cost function, which relates cost of production to level of output and other variables which t

Income elasticity of demand, what are the practical importance of income el...

what are the practical importance of income elasticity of demand?

Calculate wi’s cost of debt and wacc, 1.    Introduction Wood Investm...

1.    Introduction Wood Investments (WI) is a private equity fund that specialises in the leveraged acquisition of publicly-quoted companies with the intention of producing h

Baumol tobins inventory model, Under specified assumptions, derive the squa...

Under specified assumptions, derive the square-root formula of the Baumol-Tobin's inventory model of transactions demand for money and briefly describe the effect of a one period i

Determines price and output in the long run, Problem 1: (a) Differentia...

Problem 1: (a) Differentiate between positive and negative externalities? Justify your answer using examples. (b) To what extent do government policies influence externali

Write Your Message!

Captcha
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