Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 11. nat-t-cat industries just went public. as a gr

11. Nat-T-Cat Industries just went public. As a growing firm, it is not expected to...

80.2K

Verified Solution

Question

Accounting

11. Nat-T-Cat Industries just went public. As a growing firm, it is not expected to pay a dividend for the first five years. After that, investors expect Nat-T-Cat to pay an annual dividend $1.00 per share (i.e., D6 = 1.00), with no growth. If the required return is 10%, what is the current stock price?

17. The projected earnings per share for Risky Ventures, Inc. is $3.50. The average PE ratio for the industry composed of Risky Ventures closest competitors is 21. After careful analysis, you decide that Risky Ventures is a little more risky than average, so you decide a PE ratio of 23 better reflects the markets perception of the firm. Estimate the current price of the firms stock.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students