Sisters Corp. expects to earn $34 per share next year. The
firm’s ROE is 10% and...
Sisters Corp. expects to earn $34 per share next year. The
firm’s ROE is 10% and its plowback ratio is 40%. If the firm’s
market capitalization rate is 8%, what is the present value of its
growth opportunities?
Sisters Corp. expects to earn $4 per share next year. The firm’s
ROE is 15% and its plowback ratio is 60%. If the firm’s market
capitalization rate is 10%.
a. Calculate the price with the constant dividend
growth model. (Do not round intermediate
calculations.)
b. Calculate the price with no growth.
c. What is the present value of its growth
opportunities? (Do not round intermediate
calculations.)
Firm XYZ expects to earn $6 per share next year. In the next
three years, the firm’s ROE is expected to be 12%, 15%, 18%,
respectively, and its dividend payout ratio is 90%. After that, the
firm's ROE is expected to increase to 25%, and the firm will set
the dividend payout ratio = 60%. Assume that the discount rate is
20%. Find the stock price
Solarpower Systems expects to earn
$20
per share this year and intends to pay out
$10
in dividends to shareholders (so,
Upper D 10 (D0=$10)
and retain
$10
to invest in new projects with an expected return on equity
of
19%.
In the future, Solarpower expects to retain the same dividend
payout ratio, expects to earn a return of
19%
on its equity invested in new projects, and will not be
changing the number of shares of ordinary shares outstanding....
High-tech company expects to earn $65 per share at the end of
the year and intends to pay out $35 in dividends to shareholders.
The company’s net income is 500 million and its common share equity
is $2,000 million
A) Compute the future growth rate.
B) If the investors’ required rate of return for
High-tech’s stock is 18 percent, estimate the company’s common
stock value.
C) High-tech’s finance director is considering a
change in the dividend policy and continue with...
A stock expects to pay a dividend of $3.72 per share next year.
The dividend is expected to grow at 25 percent per year for three
years followed by a constant dividend growth rate of 4 percent per
year in perpetuity. What is the expected stock price per share 5
years from today, if the required return is 12 percent?
Greshak Corp. forecasts its dividends to be $4.00 per share next
year, $4.50 per share in two years, and $5.00 per share in three
years. After the third year, dividends are anticipated to grow at a
constant sustainable rate of 4.0% per year. If Greshak’s cost of
capital is 12.0% and its applicable tax rate is 30.0%, what is the
estimated share price for the company's common
equity? YOU MUST USE AT LEAST 4 DECIMAL PLACES
IN ALL CALCULATIONS AND SHOW...
Corp. forecasts its dividends to be $2.25 per share next year,
$2.75 per share in two years, and $3.60 per share in three years.
After the third year, dividends are anticipated to grow at a
constant sustainable rate of 5.0% per year. If cost of capital is
16.0% and its applicable rate is 35.0%, what is the estimated share
price for the company's common equity? YOU MUST USE AT
LEAST 4 DECIMIL PLACES IN ALL CALCULATIONS AND SHOW ALL WORK...
Rump Electric Power Ltd expects to earn $20 per share this year
and intends to pay out $8 per share in dividends to shareholders
and retain $12 per share to invest in new projects with an expected
return on equity of 20%. In the future, Rump Electric Power Ltd
expects to retain the same dividend payout ratio, expects to earn
20% return on its equity invested in new projects, and will not be
changing the number of ordinary shares outstanding....
Solarpower Systems expects to earn $2020 per share this year and
intends to pay out $99 in dividends to shareholders (so,Upper D 0
equals $ 9D0=$9) and retain $1111 to invest in new
projects with an expected return on equity of 1919%. In the
future, Solarpower expects to retain the same dividend payout
ratio, expects to earn a return of 1919% on its equity invested in
new projects, and will not be changing the number of shares of
ordinary shares...
ENN Inc. expects to earn $2 per share in year 1. The company has
a policy of retaining 60 percent of its earnings and investing them
at a return (R) of 20 percent. Stockholders in EG expect a return
(K) of 15 percent on the stock.
What price should ENN’s stock sell for?
What is the premium for growth and the PE ratio
The company has just come up with a new highly profitable
product. As a result it...