Question

Rumor has it that GOJEK is planning to issue its series G of preferred share in...

Rumor has it that GOJEK is planning to issue its series G of preferred share in September 2020. This series will promise an Rp.1,000,000 per share return annually. You are interested to buy this series, and as usual, your required rate of return is 7%. Now:

  1. a) What is the maximum price of this series so you are willing to invest in? Show your calculation.

  2. b) As usual, also, this series of GOJEK issuance has a convertible clause after 10 years. What does this mean?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) Preferred shares dividend = Rp.1,000,000

Required return = 7%

The maximum price we are willing to pay for this preferred share series is $14,285,714.2857143

b) This series of GOJEK issuance has a convertible clause after 10 years. This means that after 10 years, the preferred shares can be converted into common shares so that voting rights may be obtained.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. What is the price of a share of preferred stock that has a dividend of...
1. What is the price of a share of preferred stock that has a dividend of $3 if the cost of preferred (rp) is 15% 2. What would you pay for a share of common stock if you expect the next dividend to be $3 and you expect to sell it in one year for $25, assuming the cost of equity (re) is 15%. 3. MBV is a cruise line which announced that dividends are expected to grow by 3.5...
TXS Manufacturing has an outstanding preferred stock issue with a par value of ​$6060 per share....
TXS Manufacturing has an outstanding preferred stock issue with a par value of ​$6060 per share. The preferred shares pay dividends annually at a rate of 1111​%. a.  What is the annual dividend on TXS preferred​ stock? b.  If investors require a return of 88​% on this stock and the next dividend is payable one year from​ now, what is the price of TXS preferred​ stock? c.  Suppose that TXS has not paid dividends on its preferred shares in the...
TXS Manufacturing has an outstanding preferred stock issue with a par value of ?$69 per share....
TXS Manufacturing has an outstanding preferred stock issue with a par value of ?$69 per share. The preferred shares pay dividends annually at a rate of 11% a.??What is the annual dividend on TXS preferred? stock? b.??If investors require a return of 4% on this stock and the next dividend is payable one year from? now, what is the price of TXS preferred? stock? c.??Suppose that TXS has not paid dividends on its preferred shares in the last two years...
You are planning to make an investment in a fund that has 5 years to maturity...
You are planning to make an investment in a fund that has 5 years to maturity and just made a dividend payment of $10 per share. Future payments are expected to increase at a rate of 8% per year over the next 5 years, which is your expected holding period for the investment. If your required rate of return is 11% p.a., how much would you be willing to pay for each share of the fund in which you intend...
(a) Company A has issued perpetual preferred stock with a par value of $100. The stock...
(a) Company A has issued perpetual preferred stock with a par value of $100. The stock pays an annual dividend of $6 and its current price is $60. (i) What is the dividend yield of Company A’s preferred stock? (ii) What is the total return of holding Company A’s preferred stock for year 1?   (b) Company B has just paid a dividend of $2.45 per share. The company will increase its dividend by 20% next year and then reduce its...
Q1/Character Co. offers a common stock that pays an annual dividend of $3.36 a share. The...
Q1/Character Co. offers a common stock that pays an annual dividend of $3.36 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 7.82 percent return on your equity investments? Q2/The Onboard Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 23.3 percent a year for the next 3...
2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She tells you that...
2. Your stockbroker has called has called you about Netflix, Inc. (NFLX). She tells you that Netflix is selling for $370.00 per share and that she expects the price in one year to be $395.00. The expected return on NFLX has a standard deviation of 20 percent. The market risk premium for the S & P 500 has averaged 6.0 percent. The beta for NFLX is 1.14. The ten-year Treasury bond rate is 3 percent. NFLX does not pay a...
CORP FIN FINAL PT D 25. You want to have $1 million in your savings account...
CORP FIN FINAL PT D 25. You want to have $1 million in your savings account when you retire. You plan on investing a single lump sum today to fund this goal. You are planning on investing in an account which will pay 7.5% annual interest. Which of the following will reduce the amount that you must deposit today if you are to have your desired $1 million on the day you retire (there could be more than one answer)?...
QUESTION 1: XYZ Inc. has 10 million shares of common stock outstanding. The current share price...
QUESTION 1: XYZ Inc. has 10 million shares of common stock outstanding. The current share price is $20 per share. The most recent dividend was $1 and the dividend growth rate is 4%. XYZ also has a bond issue outstanding, which is maturing in 15 years, has a face value of $100 million, 7% coupon payable annually, and sells for 83.8786% of the face value. XYZ also has 2,000,000 preferred shares outstanding, which are currently selling for $40 per share...
Question 1 The next dividend payment by A Company will be $1.73 per share. The dividends...
Question 1 The next dividend payment by A Company will be $1.73 per share. The dividends are anticipated to maintain a 0.06% growth rate forever. If the stock currently sells for $16.44 per share, what is the investors' required return rate? (Round the final answer to 4 decimal places.) Question 2 You have an 0.066% semiannual-pay bond with a face value of $1,000 that matures in 11 years. If the yield is 0.09%, what is the price of this bond?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT