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Common stock value for Dennis and Dennis Research Inc

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The common stock of Denis and Denis Research, Inc., trades for $60 per share. Investors expect the company to pay a $3.90 dividend next year, and they expect that dividend to grow at a constant rate
forever. If investors require a 10% return on this stock, what is the dividend growth rate that they are anticipating?

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Current trade price of Common stock: $60 per share
Expected dividend next year: $3.90 per share
Required Return on stock: 10%
The below formula is used to ...

Solution Summary

This tutorial provides guidelines on how to solve common stock value problem when there is constant growth in the dividend.

$2.19
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Obtain the 2010 financial statements and notes (annual report or 10-K) for Monro Muffler Brake, Inc. (MNRO). Use Tenneco for a benchmark and comparison purposes. This means ratios must be completed for both companies (but a description of the company only needs to be done for Monro).

To assess a company's financial statements, think specifically about: (1) the types of underlying transactions and events that affect the company, (2) how well the financial accounting rules (i.e., GAAP) reflect those transactions and events, (3) the aggressiveness or conservatism of management's accounting choices, and (4) how the annual report helps you assess the company's risks, financial position, and profitability.

For each item below, provide an easy to read and understandable presentation of the facts for your company. There should be a brief description of the items (Monro) and computational analysis (ratios).

LONG-TERM DEBT, CONTINGENCIES AND LEASES:
? Description of long-term debt
? Major leasing activities (if any) and types of leases involved
? Business reasons for, and importance of leasing activities
? Other significant liabilities disclosed for contingencies, warranties or commitments and their importance

Things to consider: Description of debts, Debt Percentage, Operating leases vs Capital leases, Present Value of bonds and leases, etc.

Link for Munro 10K:
http://quote.morningstar.com/stock-filing/Annual-Report/2011/3/26/t.aspx?t=XNAS:MNRO&ft=10-K&d=494a5ad12f3cde1f4e477c4bd3c24f2b

Link for Tenneco 10K:
http://www.tenneco.com/media/annualreport/pdfs/Tenneco-2010-10-K.pdf.

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