stock valuation, Financial Management

Assignment Help:
I just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. I also told that the dividends would grow continually at a rate of 3% per year starting from year 5 onwards. Assuming the required rate of return to this stock is 12%,
a) What will be the expected price of the stock at the end of year 4?
b) What is today’s expected value of the stock?
c) If the stock is currently being sold at $5.00, should I will buy the stock? Need the explain.

Related Discussions:- stock valuation

Extendible reset bonds, Extendible reset bonds are floaters in which ...

Extendible reset bonds are floaters in which the issuer is required to reset the coupon rate so that the issue will trade at a predetermined price (usually above

Discuss about the materiality, Discuss about the Materiality An item ca...

Discuss about the Materiality An item can be considered material if its omission would reasonably influence the decisions of an addressee of report, a misstatement is material

Computation of working capital, Will you please define the working capital ...

Will you please define the working capital and Calculation of working capital? I need urgent help in my assignment. help me!

Forward market evaluation, Forward market evaluation Net receipt in 1 m...

Forward market evaluation Net receipt in 1 month = 240000 - 140000 = $100000 Nedwen Co requires to sell dollars at an exchange rate of 1.7829 + 0.003 = $1.7832 per £ Ster

Inflated budgeted expense account, Write down what processes and data you w...

Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements you could include to ensure that the problem would be l

APR and EAR, Assume a bank charges a 15.5% APR (annual percentage rate) on ...

Assume a bank charges a 15.5% APR (annual percentage rate) on credit card holder compounds quarterly. What EAR (effective annual rate) is the bank is charging? What if they change

Explain basril plc, BASRIL PLC (a) (i) Analysis of projects assum...

BASRIL PLC (a) (i) Analysis of projects assume they are divisible. Project 2 NPV at 12% = (140800 × 3·605) - 450000 = $57584 Project 2 profitability index = 5

Automatic reinvestment plan, Automatic Reinvestment Plan Like in the US...

Automatic Reinvestment Plan Like in the US, UTI India has also started this plan where the amount of dividend and other income accrued on mutual fund investments is automatical

Determine the factors of financial risk by giving example, Determine the fa...

Determine the factors of financial risk by giving example W. T. L. Company's cost of long-term debt two years ago was 8 percent.  This 8 percent was found to represent a 4- per

Analyse the corporate governance issues facing x company, M has recently jo...

M has recently joined the board of X Company, a main listed confectionary manufacturer. The company was established as a family business over a century ago and members of the found

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