Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Feb 15, 2023

Company ABC has just paid a dividend of $2 per share. The expected growth rate of the dividend is 5% per year. The required rate

Company ABC has just paid a dividend of $2 per share. The expected growth rate of the dividend is 5% per year. The required rate of return by the market is 10%. What is the intrinsic value of the stock?

Step by Step Solution

★★★★★

3.38 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

The detailed answer for the above question is provided below The intrinsic value of a stock can be c... 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

Step: 3

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

Investments Analysis and Management

Authors: Charles P. Jones

12th edition

978-1118475904, 1118475909, 1118363299, 978-1118363294

More Books

Students also viewed these Finance questions

Question

★★★★★

The Webster Company has just paid a dividend of $5.25 per share. The company will increase its dividend by 14 percent next year. The company will then reduce its dividend growth rate by 3 percent...

Answered: 1 week ago

Question

★★★★★

The Duo Growth Company just paid a dividend of $1 per share. The dividend is expected to grow at a rate of 25% per year for the next 3 years and then to level off to 5% per year forever. You think...

Answered: 1 week ago

Question

★★★★★

ABC Corp. has just paid a dividend of $0.58. ABC has an annual required return of 9.09%. Intrinsic value calculated is $6.38. ABC's dividend yield is 0.0909. I need to solve the following. Please...

Answered: 1 week ago

Question

★★★★★

Make a Marketing Plan for business during the Covid 19 Pandemic as it is today. Position yourself as an entrepreneur looking to open a new business or expand your existing business. Use assumptions...

Answered: 1 week ago

Question

★★★★★

You are responsible for an operation that has 12 distinct jobs. Seven of those jobs must be processed in two operations: D and E. All seven jobs must go through D and E in that sequence, i.e., D...

Answered: 1 week ago

Question

★★★★★

Tom Adams has received a job offer from a large investment bank as a clerk to an associate banker. His base salary will be $71,000. He will receive his first annual salary payment one year from the...

Answered: 1 week ago

Question

★★★★★

2. Evaluate evidence concerning the extent to which those who have repeatedly broken the criminal law can be rehabilitated using psychosocial interventions. Give your views on whether this evidence...

Answered: 1 week ago

Question

★★★★★

You are a manager in charge of monitoring cash flow at a company that makes photography equipment. Traditional photography equipment comprises 80 percent of your revenues, which grow about 2 percent...

Answered: 1 week ago

Question

★★★★★

what is a document that captures and defines the work activities and deliverables, and a timeline a vendor must execute in performance of specified work for a client?

Answered: 1 week ago

Question

★★★★★

On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances: During January 2021, the following transactions occur: January 2 Issue an additional 2,000...

Answered: 1 week ago

Question

★★★★★

please dont use chat gpt 2 4 .

Answered: 1 week ago

Question

★★★★★

Ye' Olde Barrel Shop sells oak barrels to a local winery. The Master Cooper would like to reduce her oak lumber inventory by determining the optimal number of oak boards to order. The annual demand...

Answered: 1 week ago

Question

★★★★★

The first use of aircraft for moving materials occurred in India, in 1911, when 6,500 pieces of mail were carried for a distance of five miles. Two other early mail flights, taking place in the same...

Answered: 1 week ago

Question

★★★★★

Many people who travel to the Czech Republic come back with tales of the history, people, majesty of the country, and stories of the beer that to some is the heart of the country. A spa in The Czech...

Answered: 1 week ago

Question

★★★★★

A service delivery process is a process enabling the delivery of a service. It requires a coupling between a provider and consumer and sometimes necessitates means. The service is returned as long as...

Answered: 1 week ago

Question

★★★★★

(a) From the information gathered from the rationale of hackers and impact of cyber- attack, organisations can improve their security posture against cyber adversaries. (i) (ii) (iii) Recommend and...

Answered: 1 week ago

Question

★★★★★

Georgie has gross income of $5,000 from an activity that has been deemed to be a hobby by the IRS. Her expenses related to the activity include property taxes of $3,000, operating expenses of $1,500,...

Answered: 1 week ago

Question

★★★★★

Discrete sample spaces: suppose there are N cable cars in San Francisco, numbered sequentially from 1 to N. You see a cable car at random; it is numbered 203. You wish to estimate N. (See Goodman,...

Answered: 1 week ago

Question

★★★★★

Assume an investor is in the 28 percent federal tax bracket and faces a 7 percent marginal state tax rate. What is the combined TEY for a municipal bond paying 6 percent?

Answered: 1 week ago

Question

★★★★★

What does it mean for Treasury bills to be sold at a discount?

Answered: 1 week ago

Question

★★★★★

What impact does the market have on well-diversified portfolios? What does this suggest about the performance of mutual funds?

Answered: 1 week ago

Question

★★★★★

=+54. Suppose not only that the two population or treatment response distributions are normal but also that they have equal variances. Let 2 denote the common variance. This variance can be estimated...

Answered: 1 week ago

Question

★★★★★

=+52. The degenerative disease osteoarthritis most frequently affects weight-bearing joints such as the knee. The article Evidence of Mechanical Load Redistribution at the Knee Joint in the Elderly...

Answered: 1 week ago

Question

★★★★★

=+b. Calculate a 95% confidence interval for the difference between true average degree of polymerization for the middle range and that for the high range. Does the interval suggest that 1 and 2 may...

Answered: 1 week ago

Previous Question Next Question