Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem1: Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25 percent for the next four years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was 1.25 dollars, its beta is 1.20, the market risk premium is 5.50 percent, and the risk-free rate is 3.00 percent. find out the current price of the common stock?

[A] $26.77

[A] $30.21

[C] $31.42

[D] $27.89

[E] $29.05

problem2: Savickas Petroleum’s stock has a required return of 12 percent, and the stock sells for 40 dollar per share. The firm just paid a dividend of 1.00 dollar, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X percent per year forever. What is the stock’s expected constant growth rate after t = 4, i.e., what is X?

[A] 5.72%

[B] 6.02%

[C] 6.34%

[D] 5.17%

[E] 5.44%

problem3: The Ramirez Company's last dividend was 1.75 dollar. Its dividend growth rate is expected to be constant at 25% for two years, after which dividends are expected to grow at a rate of 6 percent forever. Its required return [rs] is 12 percent. Determine the current stock price?

[A] $43.71

[B] $44.80

[C] $45.92

[D] $41.58

[E] $42.64

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916710

Have any Question? 


Related Questions in Basic Finance

Modify the cpl lagrangian heuristic to account for the case

Modify the CPL Lagrangian heuristic to account for the case where the demand is indivisible (i.e. the demand of any successor node must be satisfied by a single facility). Is the modified heuristic still time-polynomial? ...

Evaluate the expression uwxyz exactly as parenthesized ie

Evaluate the expression (u+)+(w+x)+(y+z) exactly as parenthesized (i.e., do not use the commutative or associative laws to reorder the additions). Give register-level machine code to provide the maximum possible parallel ...

1 do not-for-profit organizations other than governments

1. Do not-for-profit organizations, other than governments, use fund accounting? Comment. 2. The accounting for governments is centered on the entity concept and the efficiency of the entity. Comment 3. For governmental ...

Compute probabilitiesthenbsparea under the normal

Compute probabilities. The area under the normal curve from x = a to x = b with given mean and standard deviation is the probability that x assumes a value between x = a and x = b. If we are using Table IV in Appendix C, ...

A video posted to the wall street journals web site in

A video posted to the Wall Street Journal's Web site in mid-2010 was titled "Equities May Have Rallied Too Much, Buy Puts." a. What are equities? b. What does it mean that "equities may have rallied too much"? c. If equi ...

1 what is the economic rationale for the cost approach

1. What is the economic rationale for the cost approach? Under what conditions would the cost approach tend to give the best value estimate? 2. What is the economic rationale for the sales comparison approach? What infor ...

1 to what agencies and other users of financial statements

1. To what agencies and other users of financial statements must banks report? 2. Why must the user be cautious in analyzing bank holding companies? 3. What is usually the biggest expense item for a bank? 4. What does th ...

1 briefly explain why the financial system is one of the

1. Briefly explain why the financial system is one of the most highly regulated sectors of the economy. 2. What is the Federal Reserve? Who appoints the members of the Federal Reserve's Board of Governors? How do the Fed ...

1 what are some of the factors that make up a communitys

1. What are some of the factors that make up a community's economic profile? How do these factors influence that community's disaster risk? 2. Visit FEMA's disaster declaration archive at http://www.fema.gov/news/disaste ...

Determine which report format is bestfor each of the

Determine which report format is best. For each of the following scenarios, which report format would you choose and why? If you would use a primarily text-based report format, identify whether you would create a separat ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro