Question: All the questions below are linked together. How do I solve for number 4 (I think we solve for fair price correct me if I

All the questions below are linked together. How do I solve for number 4 (I think we solve for fair price correct me if I am wrong)? The Answer to each part is bold and in "( ) ". I am not able to get 24.66 in 4.

1.Last year Trumpco paid a 2.30 per share dividend. The beta is 2.1, the market is expected to earn 10%, and the risk free rate is 3%. If dividends remain at 2.30 per year forever, what is a fair price? (12.99)

2.What if Trumpco's dividends grow at 6% per year forever? (20.84)

3.Find the dividend yield and capital gains yield for the stock in number 2. (.117 and .06)

4.What if Trumpco's dividends grow at 4% for one year, than at 8% forever after that? (24.66)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1. Situation In this section of the case analysis, you will focus on identifying situational aspects that have led to the situation being reported in the case. These aspects should include relevant...

"This hotel business wouldn't be so bad if it wasn't for the people!" Derek Duke thought as he considered his first 11 months as general manager (GM) at The Regal Pointe Hotel and Spa. Duke was...

This week's assignment is the analysis of a business case (attached). These cases are reflective of actual business decisions in modern-day organizations. As we strive to enhance our analytical,...

ed consequences. ASSIGNMENT To fully complete this case assignment, please read and analyze the assigned case. Be sure to speak in OB language throughout to reflect your knowledge of the terminology...

The questions below are linked together. Answer to each part is in "(..)" . I am having trouble figuring out part 4. I am not able to get the answer 24.66 Please show me how to do question 4. Also in...

NEED EXCEL FORMULAS & ANSWERS PLEASE, THANK YOU!!! AutoSave OFF HESU- Direct Material - Direct Labor Variances - Blank File.xls - Compatibility Mode Home Insert Draw Page Layout Formulas Data Review...

BCO 313: Negotiation at Work Anne Dwyer: a.dwyer@euruni.edu Negotiation at Work \"Managers and executives negotiate constantly over issues as varied as hiring decisions and purchases, corporate...

N A S TIO I C VE A N T I IZ O E T N R C A TI O PE G CA E S R NI H R T E O U P OR M 2 F OM E R T P C A L C H A L LEARNING OBJECTIVES After studying this chapter, you will be able to answer several...

\fThis is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does...

(See Exercise 60 regarding the data, and Exercise 61 for the Sharpe ratio.) (a) Find the Sharpe ratio of stock in these three companies. Which looks best from this investment point of view? (b) Form...

Select a job category and then determine the median compensation figures for this position in eight different locations within the United States. Should an organization that operates in these...

Given ( x , 5 ) and ( 6 , y ) , find x and y such that the midpoint between these two points is ( 3 , 3 ) .

Conseco Oil Company has an account titled Oil and Gas Properties. Conseco paid $6,000,000 for oil reserves holding an estimated 500,000 barrels of oil. Assume the company paid $550,000 for additional...

Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $ 700,000. The contract represents a single performance obligation that will be...

A firm has a production function given by Q = 10K0.25L0.25. Suppose that each unit of capital costs R and each unit of labor costs W. a. Derive the long-run demands for capital and labor. b. Derive...

Margarita Robotics has a daily production function given by Q = K0.5L0.5, where K is the monthly number of hours of use for a precision lathe (capital) and L is the monthly number of machinist hours...

A firm has a production function of Q = 0.25KL0.5, the rental rate of capital is $100, and the wage rate is $25. In the short run, is fixed at 100 units. a. What is the short-run production...

Create a 200 word summary on the Juvenile Justice System than and today. Describe The Juvenile system and provide a generalizable definition. Highlight the issues in the Juvenile system and why this...

Patient's Hospital (Cost Allocation, Step Method): The annual costs of hospital care under the medicare program amount to $20 billion per year. In the medicare legislation, Congress mandated that...

(Appendix) Patient's Hospital-Simultaneous Solution Method (computer required): Refer to the facts in case 5-37. What is the claim for medicare services, using the simultaneous solution method?

The manager of an operating department just received a cost report and has made the following comment with respect to the costs allocated from one of the service departments: "This charge to my...