Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Kigugu 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% for the next 4 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, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

a. $26.77

b. $27.89

c. $29.05

d. $30.21

e. $31.42

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M940464

Have any Question? 


Related Questions in Basic Finance

1 what are some of the key cost trade-offs that the

1. What are some of the key cost trade-offs that the financial manager must focus on when attempting to manage short-term accounts in a manner that minimizes cash? Prepare a graph describing the general nature of these c ...

1 how many teams of five students each can be formed in a

1. How many teams of five students each can be formed in a class of 15 students? 2. Calculate 4C 2 and 5C 3 . 3. If you are offered $20 to draw a red ball from a bag that contains six green balls, two blue balls, and two ...

Level a basic a1-a17 - a1 bond valuation a 1000 face value

LEVEL A BASIC A1-A17 - A1. (Bond valuation) A $1,000 face value bond has a remaining maturity of 10 years A1. (Bond valuation) A $1,000 face value bond has a remaining maturity of 10 years and a required return of 9%. Th ...

Internationalization of human resources at obirenowned for

Internationalization of human resources at OBI Renowned for its orange big box stores, OBI is one of the leading DIY/home improvement retail brands in Europe. Founded in Germany in 1970, the company currently operates ab ...

Lowell made a taxable gift of 2 million to his grandson and

Lowell made a taxable gift of $2 million to his grandson and allocated his remaining exemption of $500,000 to the gift. What is Lowell's GST tax liability in 2014?

1 distinguish between the two types of balloon mortgages2

1. Distinguish between the two types of balloon mortgages. 2. What is the difference between a permanent and temporary buydown mortgage? 3. Discuss the advantages and disadvantages found in shorter-term mortgage loans. 4 ...

Suppose that you are following the stock of a firm that has

Suppose that you are following the stock of a firm that has been experiencing severe problems. Failure is imminent unless the firm is granted government guaranteed loans. If the firm fails, its stock will, of course, fal ...

1 explain how replication can be conceptualized as a

1. Explain how replication can be conceptualized as a factorial experimental design. 2. Why are research programs more important to the advancement of science than are single experiments? 3. Define a meta-analysis, and e ...

Stock a offers an expected return equal to 18 with a

Stock A offers an expected return equal to 18% with a standard deviation equal to 22%. Gold offers an expected return equal to 10% with a standard deviation equal to 30%. The correlation between stock A and gold is equal ...

You own 21500 of city steel stock that has a beta of 332

You own $21,500 of City Steel stock that has a beta of 3.32. You also own $38,500 of Rent-N-Co (beta = 1.77) and $20,700 of Lincoln Corporation (beta = -.83). What is the beta of your portfolio?

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen