FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume Evco, Inc. has a current stock price of $54.38 and will pay a $2.10 dividend in one year; its equity cost of capital is

Assume Evco, Inc. has a current stock price of $54.38 and will pay a $2.10 dividend in one year; its equity cost of capital is 19%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? Round to the nearest cent.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance A Contemporary Application Of Theory To Policy

Public Finance A Contemporary Application Of Theory To Policy

Authors: David N Hyman

8th Edition

0324259700, 978-0324259704

More Books

Students also viewed these Finance questions

Question

★★★★★
Troy (single) purchased a home in Hopkinton, MA, on January 1, 2007, for $300,000. He sold the home on January 1, 2015, for $320,000. How much gain must Troy recognize on his home sale in each of the...

Answered: 1 week ago

Question

★★★★★
Determine whether each of the following independent statements best applies to a defined contribution plan(DCP), a defined benefit plan (DBP), both(B), or neither (N): a. The amount to be received at...

Answered: 1 week ago

Question

★★★★★
3. Applying: Using a general concept to solve a particular problem.

Answered: 1 week ago

Question

★★★★★
The following data were accumulated for use in reconciling the bank account of Spectrum Co. for July: a. Cash balance according to the company's records at July 31, $8,346.50. b. Cash balance...

Answered: 1 week ago

Question

★★★★★
b . In Design mode, edit the placeholder text so that it appears as follows: Click here to type your first name.

Answered: 1 week ago

Question

★★★★★
Robertos Honey Farm in Chile makes five types of honey: cream, filtered, pasteurized, mlange (a mixture of several types), and strained, which are sold in 1 kilogram or 0.5 kilogram glass containers,...

Answered: 1 week ago

Question

★★★★★
Kaelea, Inc., has no debt outstanding and a total market value of $153,000. Earnings before interest and taxes, EBIT, are projected to be $9,500 if economic conditions are normal. If there is strong...

Answered: 1 week ago

Question

★★★★★
. What is meant by the term cash flow? For the table below determine the yearly cash flows and the total cash flow. If a discounting rate of 8% is used what is the Net Present Value? Year 0 1 2 3 4 5...

Answered: 1 week ago

Question

★★★★★
Give two additional competencies that will be required for future project management efforts

Answered: 1 week ago

Question

★★★★★
Dying for a Paycheck, Jeffrey Pfeffer: Pfeffer presents layoffs as a lose-lose proposition and lays out the case through data that companies don't have to resort to layoffs. Layoffs negatively impact...

Answered: 1 week ago

Question

★★★★★
A maintenance workshop wants to add a new welding station. So the welding manager asked the simulation engineer to provide him with how much space should they allocate. What measures can the...

Answered: 1 week ago

Question

★★★★★
Are social media companies culpable, complicit, or capable in relation to societal harms perpetrated on their platform - and what might Nike's Project Rewire look like for a social media company...

Answered: 1 week ago

Question

★★★★★
3. Self-awareness is very important. As we get to know ourselves, we can identify barriers to acceptance by others. Once you have identified your most preferred communication style, you have taken a...

Answered: 1 week ago

Question

★★★★★
4. You have been given the opportunity to complete an online assessment of your communication style (see page 64). After completion of this assessment you were provided with a profile that indicates...

Answered: 1 week ago

Question

★★★★★
1. If Ms. Perez displays the characteristics of the Director communication style, how should Eric conduct himself during the meeting? Be specific as you analyze those behaviors that would be admired...

Answered: 1 week ago

Previous Question Next Question