A fast growing firm recently paid a dividend of $0.35 per share. The dividend is expected to increase at a 20 percent rate for the next three years. Afterwards, a more stable 12 percent growth rate can be assumed. If a 13 percent discount rate is appropriate for this stock, what is its value?
Answer to relevant QuestionsA fast-growing firm recently paid a dividend of $0.40 per share. The dividend is expected to increase at a 25 percent rate for the next four years. Afterwards, a more stable 11 percent growth rate can be assumed. If a 12.5 ...JP Morgan Chase Co. (JPM) has earnings per share of $3.53 and a P/E ratio of 13.81. What is the price of the stock? Many employees believe that their employer’s stock is less likely to lose half of its value than a well diversified portfolio of stocks. Explain why this belief is erroneous. Describe the diversification potential of two assets with a -0.8 correlation. What is the potential if the correlation is +0.8? An investor owns $6,000 of Adobe Systems stock, $5,000 of Dow Chemical, and $5,000 of Office Depot. What are the portfolio weights of each stock?
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