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

Increased common stock cash dividend signal to stock holder, Do you believe...

Do you believe an increased common stock cash dividend can send a signal to the common stockholders?  If so, what signal might it send? An enhance in cash dividends is often se

Issuance calendar, Issuance Calendar Issuance calendar gives clear and ...

Issuance Calendar Issuance calendar gives clear and timely information about the borrowing program of the government. It clearly conveys the maturity profile of outstanding sto

Explain to tr, TR has recently been promoted to his first management positi...

TR has recently been promoted to his first management position. In the past, he very much enjoyed working as part of a team, but is having some difficulty in adapting to his new ro

Exchange of physicals, Exchange of Physicals: A trader can also complet...

Exchange of Physicals: A trader can also complete the futures contract by engaging in exchange of physicals. In this method, the parties agree to exchange cash and the commodit

What are the factors to consider in a takeover and merger, Factors to cons...

Factors to consider in a takeover/ merger Before a company decides to merge or acquire the following considerations should be taken: Rejection of bid by ta

Assignment, Imagine you have been allocated $100,000 which is to be investe...

Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee

Conservative approach of financial management, Q. Conservative Approach of ...

Q. Conservative Approach of Financial Management? An exact matching plan may not be followed in practice. A firm may adopt a conservative approach in financing its current and

Define the operating leverage effect, What is the operating leverage effect...

What is the operating leverage effect and what causes it?  What are the potential benefits and negative consequences of high operating leverage? The phrase operating leverage e

Illustrate dividend valuation model, Q. Illustrate dividend valuation model...

Q. Illustrate dividend valuation model? The business is being acquired as a going concern and earnings valuations rather than asset valuations are recommended. Even these are b

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