Question
Asked Nov 23, 2019
2 views

Financial analysts forecast Wal-Mart Stores (WMT) growth for the future to be 12.00 percent. Their recent dividend was $1.93. What is the value of their stock when the required rate of return is 17.00 percent?

 
check_circle

Expert Answer

Step 1

Calculation of Value of Stock:

The value of stock is $43.23.

Excel Spreadsheet:

...
А
В
1 Current Dividends
2 Growth Rate
3 Required Return
Value of Stock $43.23
$1.93
12%
17%
4
help_outline

Image Transcriptionclose

А В 1 Current Dividends 2 Growth Rate 3 Required Return Value of Stock $43.23 $1.93 12% 17% 4

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Stock Valuation

Related Finance Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Global Internet company is looking to expand their operations. They are evaluating their cost of cap...

A: Part a & b:Calculation of Cost of Capital:a. The cost of capital is 9.09%.b. The cost of capital...

question_answer

Q: ou own $14,504 of Opsware, Inc. stock that has a beta of 3.85. You also own $20,384 of Lowe’s Compan...

A: Calculation of Market Risk Premium, Risk Premium for each stock and Portfolio Risk Premium:The marke...

question_answer

Q: Skolits Corp. issued 15-year bonds 2 years ago at a coupon rate of 7.6 percent. The bonds make semia...

A: Calculate the yield to maturity (YTM) as follows:MS - Excel --> Formulas --> Financials -->...

question_answer

Q: You own a furniture manufacturing company. You are looking to expand into glass furniture and need t...

A: ARR refers to accounting rate of return, it is the percentage return on a project with respect to it...

question_answer

Q: The current price of XL Corporation stock is $40.  In each of the next two years, this stock price c...

A: Calculate the probabilities: p is 57.37% and 1-p is 42.63%.

question_answer

Q: You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 15 per...

A: a.Arithmetic average return on the company stock over this 5 year period is calculated by using AVER...

question_answer

Q: Simple Foods has a zero coupon bond issue outstanding that matures at nine years. The bonds are sell...

A: The company has a zero coupon bond that matures in 9 years with semiannual compounding.Par Value (FV...

question_answer

Q: Which figure in this worksheet is the Present Value of the company in 2014?       * *****I think it ...

A: The present value is calculated today to determine the present value of future cashflows at the give...

question_answer

Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the re...

A: The table below shows the future value of cash flows for each year.