Ans the present value of the future cash flows that the stock generates.
The present value of stock = Present value of future cash flows.
Stock Value = Future Cash flows / Discounted rates
QUESTION 19 A stock's value is equal to the risk free rate O the future value...
A stock's market capitalization is determined by a. Multiplying the number of shares outstanding by the latest stock price. b. Trial and error using its beta and the risk free rate. c. The book value of its equity times the company's debt ratio. d. The present value of its future cash flows discounted at the risk free rate.
The stock price is equal to the present value of all future cash flows from the stock discounted at ________________________. In other words, what do we call the rate at which we discount the future dividends?
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both A and B None of the above The most volatile stock would have Beta. Higher than 1.0. Lower than 1.0. Very close to 0.0. Beta is not related to volatility. Discounted cash flow techniques used in valuing common stock are based on: future value analysis. present value analysis. The CAPM. the APT. c.
the ____ of any asset is equal to the present value of its expected future cash flows discounted at the investors required rate of return
A stock has a required return of 9%, the risk-free rate is 3.5%, and the market risk premium is 4%. What is the stock's beta? Round your answer to two decimal places. ______ If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is equal to...
The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends. Calculate...
4. The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends....
The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 2.70% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends. Calculate...
(CAPM) The risk free rate of return is 3% and the stock's beta coefficient is 1.2. If the market risk premium is 8.2%.,what is the required return of stock?
Find the present value for the following string of cash flows. The risk free rate is currently 1%. A stock has a beta of 1.28 and the market risk premium is 8%. Year 1 cash flow: $1,500 Year 2 cash flow: $5,500 Year 3 cash flow: $2,010 cash flows will grow 2% indefinitely after year 3 A.$17,795.56 B.$18,668.82 C.$23,372.44 D.$25,468.65