Biogenetics, Inc plans to retain and reinvest all of their earnings for the next 30 years. Beginning in year 31, the firm will begin to pay a $12.00 per share dividend. The dividend will not subsequently change. Given a required return of 15%, what should the stock sell for today?© BrainMass Inc. brainmass.com October 24, 2018, 9:24 pm ad1c9bdddf
30 years from now, the stock price will be:
P(30) = $12/0.15 = ...
This job finds the stock price.
Stock price valuation and IRR question for Buffet's Berkshire purchase of GEICO
I would like to receive a draft response to the following question which relates to the attached case study. Please show formula and calculation in response.
'Note the Value Line forecast of dividends (on P20). Value Line's forecasts of a share price of $90 at the low end of the range and $125 at the high end of the range at YR2000. What would Buffet expect the stock price to be at YR2000 to achieve his 28% average annual gain (or IRR) on the GEICO investment in 1995?'View Full Posting Details