Gekay inc currently january 1 has a net income of 10000000, Ask an Expert

Finance

GeKay Inc. currently (January 1) has a net income of $10,000,000 which is expected to grow indefinitely(perpetuity) at 10% per annum.

The firm is financed at a debt-to -value ratio of 30%. The firm has a 50% dividend payout to shareholders (dividends paid at year-end), with 10m shares of common stock outstanding.

The firm pays taxes at the 36% rate. The stock has a (levered) Beta of 1.2 and the market risk premium (MRP) is 6%. The risk free rate (RF) is 4% and the firm's Cost of Debt is 5.5%.

Determine the stock price?

View complete question

Corporate Finance, Finance

Category:- Corporate Finance
Reference No.:- M9617838

Have any Question?Write your Review or question?

Related Questions in Corporate Finance

Assignment - npv and real option valuationproposed project

Assignment - NPV and real option valuation Proposed project: Alchemy Mines is considering an investment in the rights to a silver mine. Initial investment - The owner of the mine will sell the rights to Alchemy Mines at ...

Question - international foods have the following capital

Question - International Foods have the following capital structure: Book Value (sh.) Market Value(sh) Equity capital (2.5 million shares of sh. 10 par) 25,000,000 45,000,000 Preference capital (50,000 shares of sh,100 p ...

Assignment - preparing and analyzing a cash budgetselect

Assignment - Preparing and analyzing a cash budget Select assumptions for the following values that fall between the minimum and maximum indicated. Assumption Minimum Maximum a. Sales in month 1 $150,000 $250,000 b. Incr ...

Question - develop a forecast model for sales through

Question - Develop a forecast model for sales through operating income. Create the forecast in Excel. In a Word document, describe the set of assumptions (ratios) you used, and explain how you justify them. Attachment:- ...

Descriptionstudents are required to study undertake

Description: Students are required to study, undertake research, analyse and conduct academic work within the areas of corporate finance. The assignment should examine the main issues, including underlying theories, impl ...

Ethics and financial services assignment -learning outcome

Ethics and Financial Services Assignment - Learning Outcome - Apply ethical principles and decisionmaking models in arriving at a responsible and ethical judgement in routine and complex finance decisions Communicate the ...

Mini case assignment -problems - use internet to identify a

Mini Case Assignment - Problems - Use internet to identify a house or condo that you may be interested in investing as a rental property for 10+ years. (Suggested price range between $250k - $1 million) 1. Estimate the a ...

Discussion question -what have you learned about financial

Discussion Question - What have you learned about financial derivatives? What concepts learned do you plan to utilize in your current job, career, and personal life?

Questions -q1 fv of ordinary annuity what is the future

Questions - Q1: (FV of Ordinary Annuity) What is the future value of a $50 annuity payment over 20 years if the interest rates are 6%? Q2: (PV of Ordinary Annuity) What is the present value of above annuity? Q3: (FV and ...

Q1 delta hedgingon sept 30th 2011 exxon mobil xom stock was

Q1 (Delta Hedging) On Sept 30th, 2011, Exxon Mobil (XOM) stock was traded at $72.63 while the December XOM put option with $75 exercise price is traded at $5.00 and the December XOM call option with $70 exercise price is ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Corporate Finance Expert