Hello,
I recently misplaced my TI-84C and have an HP 12C that I seldom use (only during summer internships) as I am in undergrad right now. The exam I will be taking this week has a question on stock pricing and was wondering if any one could help me figure out what functions are used for the calculation. I am fine with bonds, amortization, NPV, and almost everything else on the 12C but have not been able to figure out what functions to use in order to solve the problem listed below.
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs
= 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price?
If anyone can help, I would really appreciate it!
Use Gordon Growth: V=D_1/(r-g).
Thank you! (trying to give you a silver banana but can't for some reason).
One cannot give silver bananas from jail. WSO knows all and knows you're in there. What, are you posting from a cell phone? That's 1 month solitary confinement.
HP12c Question (Originally Posted: 10/29/2010)
How do I calculate the following common stock valuation on my HP12C:
What is the value of a common stock that had free cash flow of $1.95 last year, has an expected growth in FCF of 6.5% and a required rate of return on 12.45%. Thanks
Depends on how many years in general, and that is when the calculator is more helpful.
If that is all the information that is given, then it would just be a perpetuity value.
1.95 * (1+ 6.5% /1.065) / (.1245-.065) = Answer
If you had to do it on a calculator, and I am not for sure on the HP12C but if I had to guess: PMT= 1.95 I/Y= (.1245-.065) / (1.065*100) N= 999 or just a large number and compute present value
HP12C Question (Originally Posted: 10/18/2010)
How would I calculate this on my HP12C calc: What is the value of a $1,000 face value coupon bond with a coupon rate of 7.5% paid annually, maturity in 24 years and a required rate of return of 8.35%? Thanks
http://www.tvmcalcs.com/calculators/apps/hp12c_bond_valuation
Google FTW
you would calculate the distance to your nearest office max and buy TI BAII+ Pro.
1000(FV) 75(PMT) 8.35(I) 24(N)...(PV)x
I'm guessing this is for a class. This is bare bones shit that you should easily know/figure out.
Texas Instruments is for high school math kids.
The 12C is the shit; excel mobile.
If RPN is too hard for you, I'm sure there's a consulting website somewhere for you to find others who sympathize.
hahaha
High school math? You used a calculator? I vaguely remember having a TI87 so I could play dope wars and snake, it might have had other functionalities. I was mostly worried about finding people to buy beer.
You can always keep the 12c on your desk while secretly using a functional calculator, a la people in my CFA prep.
I find a consulting insult humorous for someone with a "cf" label.
the hp12c....half the functionality, twice the badass
http://www.leveragedsellout.com/2008/07/chartered-financial-banalyst/
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