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

Question

1 Approved Answer

The risk-free rate is 3.53% and the market risk premium is 6.19%. A stock with a of 1.72 just paid a dividend of $1.89. The

image text in transcribed

The risk-free rate is 3.53% and the market risk premium is 6.19%. A stock with a of 1.72 just paid a dividend of $1.89. The dividend is expected to grow at 23.86% for five years and then grow at 3.16% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places

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_2

Step: 3

blur-text-image_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

The Ascendancy Of Finance

The Ascendancy Of Finance

Authors: Joseph Vogl, Simon Garnett

1st Edition

1509509305, 978-1509509300

More Books

Students also viewed these Finance questions

Question

★★★★★
A national survey on telemarketing was undertaken. One of the questions asked was: How long has your organization had a telemarketing operation? Suppose the following data represent some of the...

Answered: 1 week ago

Question

★★★★★
E125 Cobalt Industries had sales of 150,000 units at a price of $10 per unit. It faced fixed operating costs of $250,000 and variable operating costs of $5 per unit. The company is subject to a tax...

Answered: 1 week ago

Question

★★★★★
4.7 Ethanol, a fuel, is made from corn. Ethanol production in 2014 was approximately 17 times what it was in 1990. (http://www.ethanolrfa.org/, June 2015). What effect did this increased use of corn...

Answered: 1 week ago

Question

★★★★★
For Eckert Inc., variable manufacturing overhead costs are expected to be $20,000 in the first quarter of 2011, with $4,000 increments in each of the remaining three quarters. Fixed overhead costs...

Answered: 1 week ago

Question

★★★★★
The risk-free rate is 3.53% and the market risk premium is 6.19%. A stock with a of 1.72 just paid a dividend of $1.89. The dividend is expected to grow at 23.86% for five years and then grow at...

Answered: 1 week ago

Question

★★★★★
Required information SB The Platter Valley factory of Bybee Industries... [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries...

Answered: 1 week ago

Question

★★★★★
A poll of 2,195 randomly selected adults showed that 90% of them own cell phones. The technology display below results from a test of the claim that 92% of adults own cell phones. Use the normal...

Answered: 1 week ago

Question

★★★★★
Extensive Enterprise Inc. (Extensive) Balance Sheet Cash $1,625,000 Accounts payable $3,900,000 Accounts receivable $5,687,500 Accruals $2,437,500 Inventory $8,937,500 Notes payable $3,412,500 Total...

Answered: 1 week ago

Question

★★★★★
Virtual Coach is an on - line personal training service that allows athletes to upload their training data ( heart - rate, watts, perceived exertion, speed, etc. ) and then provides personalized...

Answered: 1 week ago

Question

★★★★★
Parent Co. owns 75% of Sub Co. and uses the cost method to account for its investment. The following are summarized income statements for the year ended December 31, Year 7. Income Statements For...

Answered: 1 week ago

Question

★★★★★
You are hired as a production manager within a small manufacturing firm that produces wood furniture for homes. You ask the company owner who is the CEO what the environmental management plan is. He...

Answered: 1 week ago

Previous Question Next Question