Based on the DCF approach, what is the people cost of equity from retained returns?
Estimating the cost of capital, I enjoy the following date: D0 = $1.20; P0 = $40.00; and g = 7%. Based on the DCF approach what is the cost of equity from retained earnings? Any accommodating suggestions?Answers: Cost of Equity = (D1/P0) + growth rate
--[($1.20 x 1.07)/$40] + .07
RayRay,
You've posted other problems like this, maybe you should consider doing your own homework.
Good Luck
What is stock and mutual fund? how they differ from each other?
Answers: A Stock is an individual financial note representing a share, or portion, of an individual company or organization. In effect, by buying this share, you have bought a piece of the company. If the companies successful, your share gains value and you make money, if the company becomes less successful, the value of that share falls and you stand to lose money.
A Mutual Fund is a a managed portfolio of many stocks in many companies. You and others invest your money into the fund and similar to buying an individual stock (or share) you buy a share of that combined fund. A Fund Manager manages which stocks the fund buys, sells, etc. The intention is to spread a fund around many stocks so that you can minimize losses and hopefully increase gains.
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What is the company's current stock price?
A company's last dividend be $1.00. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 10% forever. The company's required return is 12%. What is the company's current stock price? Any clues?Answers: You have to use the dividend growth model for the first two years at 15% and consequently the NPV at 10% for the remaining time. If you dont know what he dividend growth model is, then you are within the wrong course.
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Current business value depends abundantly on the business value assessment model that you choose. Especially when you want to know company flea market value. The right clue would be determine the correct assessment model first.
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If you apply dividend yield your stock must be around $50.or more at the rate of 2% let go per year.
The other figures are futuristic.