Question
In: Finance
What is the current price for abc Inc. common stock if the stock is expected to...
What is the current price for abc Inc. common stock if the stock
is expected to pay a dividend of $1.00 in one year, $1.40 in two
years and $1.90 in three years, assuming you will sell the sock in
three years for $90.39 (just after you receive the third dividend)
and the required rate of return is 8%
Solutions
Expert Solution
Current price=Future dividend and value*Present value of discounting factor(rate%,time period)
=1/1.08+1.4/1.08^2+1.9/1.08^3+90.39/1.08^3
which is equal to
=$75.39(Approx)
jeff jeffy answered 2 years agoRelated Solutions
What is the current price for ABC inc. common stock if the stock is expected to...
What is the current price for ABC inc. common stock if the stock
is expected to pay a dividend of $1.00 in one year, $1.50 in 2
years and $1.70 in three years, assuming you will sell the stock in
three years for $90.39 (just after you received the 3rd dividend)
and the required rate of return is 8%
Analyze the stock price of the Amazon common stock. What is the current stock price? Is...
Analyze the stock price of the Amazon common stock. What is the
current stock price? Is it currently overpriced or underpriced
according to the CAPM model and the dividend growth model?). Please
give a recommendation about whether to invest in Amazon or not
based on the results and current situation.
The earnings, dividends, and common stock price of Shelby Inc. are expected to grow at 3%...
The earnings, dividends, and common stock price of Shelby Inc.
are expected to grow at 3% per year in the future. Shelby's common
stock sells for $21.00 per share, its last dividend was $2.00, and
the company will pay a dividend of $2.06 at the end of the current
year.
Using the discounted cash flow approach, what is its cost of
equity? Round your answer to two decimal places.
%.......
If the firm's beta is 2.1, the risk-free rate is...
Cost of Equity The earnings, dividends, and common stock price of Shelby Inc. are expected to...
Cost of Equity
The earnings, dividends, and common stock price of Shelby Inc.
are expected to grow at 6% per year in the future. Shelby's common
stock sells for $21.00 per share, its last dividend was $2.00, and
the company will pay a dividend of $2.12 at the end of the current
year.
Using the discounted cash flow approach, what is its cost of
equity? Round your answer to two decimal places.
%
If the firm's beta is 1.5, the...
An investor purchases 300 shares of ABC stock on margin. The current price of ABC stock...
An investor
purchases 300 shares of ABC stock on margin. The current price of
ABC stock is $70 per share, the initial margin requirement is 60%
and the maintenance margin requirement is 35%.
A) What
is the dollar amount of the loan the investor receives from her
broker for this margin purchase?
B) How far can the
stock price fall before the investor gets a margin call?
Owen Inc. has a current stock price of $12.00 and is expected to pay a $0.60...
Owen Inc. has a current stock price of $12.00 and is expected to
pay a $0.60 dividend in six months. IfOwen·s equity cost of capital
is 15%, a)What price would its stock be expected to sell for
immediately after it pays the dividend?
Jacobson, Inc. has common stock with market price of $50 and expected to pay dividend of...
Jacobson, Inc. has common stock with market price of $50 and
expected to pay dividend of $2.50 per share at the end of the
year.
You intend to purchase the stock at the market price, hold it
for one year, and sell it after a dividend of $2.50 is paid. How
much will the stock price have to appreciate for you to satisfy
your required rate of return of 12 percent?
You intend to purchase the stock today, hold it...
The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow...
The future earnings,
dividends, and common stock price of Callahan Technologies Inc. are
expected to grow 6% per year. Callahan's common stock currently
sells for $28.75 per share; its last dividend was $1.50; and it
will pay a $1.59 dividend at the end of the current year.
Using the DCF
approach, what is its cost of common equity? Do not round
intermediate calculations. Round your answer to two decimal
places.
%
If the firm's beta is
2.1, the risk-free rate...
The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow...
The future earnings, dividends, and common stock price of
Callahan Technologies Inc. are expected to grow 3% per year.
Callahan's common stock currently sells for $21.00 per share; its
last dividend was $2.00; and it will pay a $2.06 dividend at the
end of the current year.
Using the DCF approach, what is its cost of common equity?
Round your answer to two decimal places. Do not round your
intermediate calculations.
%
If the firm's beta is 1.70, the risk-free...
The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow...
The future earnings, dividends, and common stock price of
Callahan Technologies Inc. are expected to grow 6% per year.
Callahan's common stock currently sells for $29.50 per share; its
last dividend was $2.50; and it will pay a $2.65 dividend at the
end of the current year.
Using the DCF approach, what is its cost of common equity? Do
not round intermediate calculations. Round your answer to two
decimal places.
%
If the firm's beta is 0.7, the risk-free rate...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
- There are a large number of tasks involved in information technology and programming, and many of...
- Using one quantitative and one qualitative health policy research method described in this chapter, design a...
- What is the Rawls' solution to the age-old question of social (economic / distributive) justice?...
ADVERTISEMENT