FREE Trial

JJ Industries will pay a regular dividend of $1.60 per share for each of the next four years. At the

This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!

Question:

JJ Industries will pay a regular dividend of $1.60 per share for each of the next four years. At the end of the four years, the company will also pay out a liquidating dividend of $53 per share, and the company will cease operations. If the discount rate is 7 percent, what is the current value of the company’s stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Expert Answer:

Answer rating: 100% (QA)

To find the current value of the company s stock we can calculate the present value of all the expec View the full answer


answer-question
Related Book For  answer-question
Fundamentals of Investments Valuation and Management

Fundamentals of Investments Valuation and Management

ISBN: 978-0078115660

7th edition

Authors: Bradford Jordan, Thomas Miller

See More Books
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Posted Date: September 29, 2023 18:48:41
See More Questions

Students also viewed these finance questions

Q:
a) Red sea industries will pay a regular dividend of $1.9 per share for the next four years. At the end of the four year, the company will also pay out a $50 per share liquidating dividend, the...
A:
Year Cashflows Workings PV 12 Present value 1 2 56 2 1 22 0 89......
Q:
The treasurer of Kelly Bottling Company (a corporation) currently has $200,000 invested in preferred stock yielding 10 percent. He appreciates the tax advantages of preferred stock and is considering...
A:
Let s go through the problems and use the provided values to answer the questions Problem 18 16 a Compute the price of the stock today P0 under Plan A D0 2 90 g 5 Ke 9 D1 D0 1 g 2 90 1 0 05 3 045 P0 D......
Q:
BQ, Inc., is considering making an offer to purchase iReport Publications. The vice president of finance has collected the following information: BQ iReport Priceearnings ratio 12.2 8.8 Shares...
A:
BQ IREPORT PRICE EARNING RATIO 12 2 8 8 SHARES OUTSTANDING 1 500 000 1 65 000 EARNINGS 4 600 000 680......
Q:
Superior Gaming, a computer enhancement company, has three product lines: audio enhancers, video enhancers, and connection-speed accelerators. Common costs are allocated based on relative sales. A...
A:
The loss if 310 000 from the constrib......
Q:
The annual number of industrial accidents occurring in a particular manufacturing plant is known to follow a Poisson distribution with mean 12. a. What is the probability of observing exactly 12...
A:
Click to View...
Q:
The Victory Plus Mutual Fund of growth stocks has had the following average monthly price for the past 10 months: Month ........ Fund Price 1 ........... 62.7 2 ........... 63.9 3 ........... 68.0 4...
A:
Exponentially Adjusted Exponentially Linear Smoothed Forec......
Q:
Identify potential bottlenecks in the following activities: a. Driving to your university b. Shopping in a supermarket c. Joyrides in an amusement park d. Check-in process at an airport e. Sale...
A:
a Driving to your university Traffic Congestion Heavy traffic especially during rush hours can cause......
Q:
Gianna Tuck is an accountant for Post Pharmaceuticals. Her duties include tracking research and development spending in the new product development division. Over the course of the past six months,...
A:
During the course of her duties Gianna has learned information that others might not know If she......
Q:
Consider the summation that is computed for x and n as inputs: S(x, n) = 1 + x +x + x + +x" **** (i-15 pts) Rewrite the above summation in such a way that you can compute S(x, n) using the values of...
A:
Click to View...
Q:
Which of the following accounts probably would be listed before the others in a chart of accounts? a. Accumulated depreciation - Buildings b. Insurance expense c. Dividends d. Accounts payable e....
A:
The correct answer is a i e Accumulated Depreciation B......
Q:
If you wished to assess the efficiency of a company, which of these ratios would you use: (a) Inventory turnover (b) Interest cover (c) Return on capital employed (d) Acid test ratio (e) Dividend...
A:
To assess the efficiency of a company you would typically use the following ratios a Inventory turno......
Q:
In respect of each of the following events, select all the effects resulting from that event that are shown in the list of effects: (i) A bad debt written off; (ii) An increase in the bank overdraft;...
A:
Let s analyze the effects of each of the events on the given effects a b c and d i A bad debt written off Effect on b Reduced current ratio When a bad......
Q:
Why is knowledge of double entry important in identifying whether some of these theories have correctly predicted behaviour?
A:
Knowledge of double entry accounting is important in identifying whether some economic theories have correctly predicted behavior for several reasons Accurate Financial Recording Double entry accounti......
Q:
A company has capital of 5 million ordinary shares of 1 each. It pays a dividend of 5% of its profits after tax of 800,000 on sales of 8 million. The market price of the shares is 2.50. What is the:...
A:
To answer these questions let s break down the information given step by step a Net profit after tax......
Q:
Explain the relationship between deprival value; replacement cost; net realisable value; and economic value.
A:
The relationship between deprival value replacement cost net realizable value and economic value is essential in the context of accounting valuation and financial decision making These concepts are us......
Q:
Best Buy Company was a late e-commerce entry, but has developed a strong e-commerce component. The key to Best Buys success, according to Barry Judge, vice president of marketing, is, We do a lot of...
A:
The three main companies businesses use to ship small packages either overnight or two day delivery are FedEx UPS and the U S Postal Service 1 What guarantees do they make about delivery After taking......
Q:
Use the graphs of f and g to graph h(x) = (f + g) (x). To print an enlarged copy of the graph, go to MathGraphs.com. 1. 2. y 24 8. 2. -2 -2 4 6
A:
1 x 0 1 2 3 f 2 3 1 2......
Q:
In Problem 18, suppose a put option with a $40 strike is also available with a premium of $2.80. Calculate your percentage return for the six-month holding period if the stock price declines to $36...
A:
Given Data Amount to invest 28 000 Current stoc......
Q:
Suppose you purchase eight call contracts on Macron Technology stock. The strike price is $60, and the premium is $3. If, at expiration, the stock is selling for $64 per share, what are your call...
A:
Given Data of contracts 8 Strike pri......
Q:
Suppose the (quoted) yield on each of the six STRIPS increases by .05 percent. Calculate the percentage change in price for the one-year, three-year, and six-year STRIPS. Which one has the largest...
A:
Given Data Maturity Price Rate May 13 99 6240 0 377 May 15 98 6860 0 441 May 18 94 6860 0 912 Quoted......
Slope Engineering For Mountain Roads Geological Society Engineering Geology Special Publication 1st Edition - ISBN: 1862393311 - Free Book