Diaz Corp. is expected to grow rapidly at a rate of 35 percent for the next seven
Question:
Diaz Corp. is expected to grow rapidly at a rate of 35 percent for the next seven years. The company’s first dividend, to be paid three years from now, will be $5. Aft er seven years, the company (and the dividends it pays) will grow at a rate of 8.5 percent. What is the value of Diaz stock with a required rate of return of 14 percent?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 63% (11 reviews)
81735 D3 500 g 85 R 14 D D 0 D3 5 P P D4 5 x 135 675 D5 675 ...View the full answer
Answered By
Shadrack Mulunga
I am a Biochemistry by profession. However, I have explored different fields of study. My quest to explore new fields has helped me gain new knowledge and skills in Business, clinical psychology, sociology, organizational behavior and general management, and Project Management. I count my expertise in Project management, in particular, creation of Work Break Down Structure (WBS) and use of Microsoft Project software as one of my greatest achievement in Freelancing industry. I have helped thousands of BSC and MSC students to complete their projects on time and cost-effectively using the MS Project tool. Generally, I find happiness in translating my knowledge and expertise to success of my clients. So far, i have helped thousands of students to not only complete their projects in time but also receive high grades in their respective courses. Quality and timely delivery are the two key aspects that define my work. All those who hired my services always come back for my service. If you hire my services today, you will surely return for more. Try me today!
5.00+
154+ Reviews
289+ Question Solved
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Question Posted:
Students also viewed these Accounting questions
-
Play Doo company is trying to choose between two projects, which both generate perpetual, growing streams of nominal cash flows. The firm must do one or the other, but cannot do both. Project A will...
-
A hose discharges water at a rate of 8 m3/min with a velocity of 50 m/s from the bow of a fireboat. Determine the thrust developed by the engine to keep the fireboat in a stationaryposition. 9
-
The Aldridge Co. is expected to grow at 6% into the indefinite future. Its latest annual dividend was $2.50. Treasury bills currently earn 7% and the S&P 500 yields 11%. a. What price should Aldridge...
-
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: For how much money must the other assets...
-
Why is it critical to develop a time-phased baseline?
-
The standard direct labor cost per unit for a company was $21 (= $14 per hour ? 1.5 hours per unit). During the period, actual direct labor costs amounted to $136,500, 9,600 labor-hours were worked,...
-
Which corporate characteristic is a disadvantage? a. Double taxation b. Mutual agency c. Limited liability d. None of the above
-
Did Crosstown have a valid contract with Borman concerning the use of the crane? If so, was it a bilateral or a unilateral contract? Explain. Grant Borman, who was engaged in a construction project,...
-
2 3. a. Show that if an is a convergent series with positive terms, then an also converges. b. Show that if an and bn are convergent series with positive terms, then an bn converges.
-
Gaucher, Friesen, and Kay (2011) found that masculine-themed words (such as competitive, independent, analyze, strong) are commonly used in job recruitment materials, especially for job...
-
Staggert Corp. will pay dividends of $5.00, $6.25, $4.75, and $3.00 in the next four years. Thereafter, the company expects its dividend growth rate to be constant at 6 percent. If the required rate...
-
Tin-Tin Waste Management, Inc., is growing rapidly. Dividends are expected to grow at rates of 30 percent, 35 percent, 25 percent, and 18 percent over the next four years. Thereafter, management...
-
Suppose you paid $60 for a ticket to see your universitys football team competes in a bowl game. Someone offered to buy your ticket for $100, but you decided to go to the game. Required: I. What did...
-
For the IKEA Business Model Analysis. What is market structure in this setting? How do they maintain product differentiation, market power? Is elasticity high/low? Are there submarkets with distinct...
-
How information is communicated both internally and externally influences the organization's reputation and culture?
-
After analyzing the population data of a bacteria colony, a microbiologist determines that the population of the bacterial colony can be modeled by the equation P(t) = 500e0.1t. (a) What is the...
-
On October 1, Sheridan Corporation's stockholders' equity is as follows. Common stock, $5 par value $378,000 Paid-in capital in excess of par-common stock 20,000 Retained earnings Total stockholders'...
-
You bought the house for $800,000 exactly five years ago. To purchase this house, you made 25 percent down and then, got a 30-year fixed rate mortgage loan. The mortgage rate was 6 percent. What...
-
True or False. If spending exceeds output, real GDP will decline as firms cut back on production.
-
If a process has a six-sigma capability, what is the process capability index? a. 1 b. 2 c. 6 d. 12
-
Simulate 10,000 paths of monthly stock prices for one year using the geometric Brownian motion stock model. Since the simulation is monthly, you need a time step of 1/12 of a year. Assume an interest...
-
The most recent financial statements for Dockett, Inc., are shown here (assuming no income taxes): Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next...
-
The most recent financial statements for GPS, Inc., are shown here: Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,300 was paid, and the company wishes to...
-
The most recent financial statements for Xporter, Inc., are shown here: Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a...
-
Discuss (1) your own results below. Are you motivated by achievement, power, or affiliation? Is there anything that surprised you? How do you think your motivations influence the way that you lead or...
-
Think of a position you currently have or had. Using the Expectancy Questionnaire, and the Analysis Form,rate each of the three areas on the dimension. For example, for item one think of the amount...
-
1. Compare and contrast the role of the project manager and the functional or operational managers. 2. What is the role of the project manager in terms of responsibility, accountability and authority...
Study smarter with the SolutionInn App