The writer is very fast, professional and responded to the review request fast also. Thank you.
Jane Wu is employed as a senior investment adviser for a large stock-broking house. One of her major responsibilities is to advise clients on the composition of their portfolios. A client has expressed interest in shares of Oran Chemical Ltd. Jane determines that Oran’s ordinary shares are currently trading at $2.50; she also discovers that the company, which has a policy of paying dividends once a year, has just paid a dividend of 30 cents per share. Based on her analysis of the information available to her concerning the company’s operations and markets, Jane forms the opinion that dividends will grow 9 percent per annum for the following 3 years and then grow at a constant compound rate of 5 percent into the foreseeable future. She also feels that a required annual rate of return of 15 percent is commensurate with Oran’s risk.
Required
(a) Calculate the value of the stock today.
(b) Calculate the value of the stock in one year’s time.
(c) Calculate the dividend yield and capital gains yield in the first year, and show how this relates to required rate of return?
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more