Problem on common stock
The AB Corp stock has a β of 1.15 and it will pay a dividend of $2.50 next year. The expected rate of return of the market is 17% and the current riskless rate is 9%. The expected rate of progress of AB is 4%. Find the value of its common stock.
Do expected equity flows coincide along with expected dividends?
Who demonstrated that how to match theoretical and market prices for normal bonds?
Explain how companies with substandard financial history can draw the attention of investors. Are investors irrational or naive?
You are an analyst in the financial division of Flipper Industries (FI) which has a beta of 1.80 (you are risk-philic, so you enjoy the thrill of working somewhere so risky). The company just paid a dividend of $1 and dividends are expected to grow at 5% per year. The
PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next five-year period if the required rate of return is 10 percent?
Who were the creators of uncertain volatility model?
Is this possible for a company with a positive net income and that does not distribute dividends to get itself in suspension of payments?
Could we suppose that, as we cannot predict the future evolution of the value of shares, a good estimation would be to consider this constant during the next five years?
Explain the definition of put–call parity described by Reinach.
Effective Utilization of Funds: It is just the decision to maximize the return on investment of funds. When finance manager is not capable to raise the return by investing fund in profitable assets or other profitable projects, company’s busines
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