Question
In: Finance
Management of Blossom, a biotech firm, forecasted the following growth rates for the next three years:...
Management of Blossom, a biotech firm, forecasted the following
growth rates for the next three years: 35 percent, 28 percent, and
22 percent. Management then expects the company to grow at a
constant rate of 9 percent forever. The company paid a dividend of
$1.70 last week. If the required rate of return is 16 percent, what
is the value of this stock? (Round intermediate
calculations and final answer to 2 decimal places, e.g.
15.20.)
what is the value of stock? $__
Solutions
jeff jeffy answered 1 year agoRelated Solutions
an annual rate of 13％for the next three years。The growth rate is A firm is expected...
an
annual rate of 13％for the next three years。The growth rate is A
firm is expected to grow expected to decrease to 10％for the
following two years and to be 4％thereafter forever。The last
dividend paid（Do）is 243.00。Dividends are paid at the end of each
year。The required rate of return is 14％，Find the intrinsic value of
the common share。Drawing a diagram will help you to organize the
information。
A firm is not expected to pay a dividend for the next three years. If the...
A firm is not expected to pay a dividend for the next three
years. If the expected share price of the firm in three years in
$29 and investors require a 11% rate of return, what is the
expected share price today?
A firm is not expected to pay a dividend for the next three years. If the...
A firm is not expected to pay a dividend for the next three
years. If the expected share price of the firm in three years is
$48 and investors require a 14% rate of return, what is the
expected share price today?
Emma Incorporated expects non-normal dividend growth over the next three years; that is a 0% growth...
Emma Incorporated expects non-normal dividend growth over the
next three years; that is a 0% growth rate in the first year, then
25%, and then 12% followed by growth of 8% thereafter. If the last
dividend paid was $2.50 and the appropriate discount rate is 12%;
what is the price of the stock today?
$67.26
$94.50
$76.64
$74.24
A company is forecasted to generate free cash flows of $45million for the next three...
A company is forecasted to generate free cash flows of $45
million for the next three years. After that, cash flows are
projected to grow at a 2.5% annual rate in perpetuity. The
company's cost of capital is 12.3%. The company has $66 million in
debt, $7 million of cash, and 13 million shares outstanding. What's
the value of each share?
Over the next three years, a firm is expected to earn economic profits of $60,000 in...
Over the next three years, a firm is expected to earn economic
profits of $60,000 in the first year, $50,000 in the second year,
and $20,000 in the third year. After the end of the third year, the
firm will go out of business. a. If the risk-adjusted discount rate
is 6 percent for each of the next three years, the value of the
firm is $________. The firm can be sold today for a price of
$________. b. If...
A company is forecasted to generate free cash flows of $53 million for the next three...
A company is forecasted to generate free cash flows of $53
million for the next three years. After that, cash flows are
projected to grow at a 2.2% annual rate in perpetuity. The
company's cost of capital is 12.8%. The company has $54 million in
debt, $6 million of cash, and 13 million shares outstanding. What's
the value of each share?
a. 33.4
b. 71.4
c. 32.7
d. 39.1
e. 45.0
A manufacturing company expects a steady 2% annual growth in profits over the next three years....
A manufacturing company expects a steady 2% annual growth in
profits over the next three years. The company wants to invest the
profits at a 10% interest rate. Expected annual profit of the
company in year one is $1,000. How much will be accumulated by the
company by the end of the third year?
Q9. You are doing research on a biotech firm. You think there are three scenarios for...
Q9. You are doing research on a biotech firm. You think there
are three scenarios for the drug depending on the results from the
clinical trials:
i. Not effective; ii. Effective; iii. Super effective
with probabilities of i 30%; ii. 40%; iii. 30%
respectively.
You believe the stock with be worth i. $50; ii. $100; iii.
$150
under those scenarios eventually.
Q9a. What is the STDEV today? (3 points)
Q9b. A preliminary trial was NOT very promising, which
eliminates the...
AXP just paid a dividend of $0.80 per share and analysts forecasted five-year growth rates of...
AXP just paid a dividend of $0.80 per share and analysts
forecasted five-year growth rates of 10.54 percent per year for AXP
and 13.21 percent per year for the industry average. Assume the
growth rate for the industry average will remain constant. Then,
assuming AXP’s growth rate will revert to the industry average
after five years, what share price would we place on AXP today, if
we use a discount rate of 15 percent per year?
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