1. Beef Co. in one year is expected to trade at $23 per share. And is...

1. Beef Co. in one year is expected to trade at $23 per share. And is expected to pay a dividend of 15 cents at the end of the year. If investments with equivalent risk have an expected return of 9%, what is the most you should pay for a Beef Co. stock today?

2. Bent CO. at the end of the year will have EPS of $7 and if the firm has a cost of capital of 12%: B) IF the firm decides to payout 25% of earnings and the firms return on investment is 15% what stock price will the company now have?

Expert Solution

jeff jeffy answered 2 years ago

A company is expected to pay a dividend of $20 per share in one year (t=1),...

A company is expected to pay a dividend of $20 per share in one year (t=1), then $25 for 8 years after that (payments at t=2 ,3,...9), and on the 10th year (t=10) the dividend will be 2% less than at t=9, and will continue to shrink every year after that forever. The required return of the stock is 8%. All rates are effective annual rates. a) What is the price per share of the company's stock now? b) The...

1.) FIN3100 is expected to pay a dividend of $3.00 per share one year from today....

1.) FIN3100 is expected to pay a dividend of $3.00 per share one year from today. FIN3100 required rate of return is rs = 7%. If the expected growth rate is 5%, at what price should the stock sell? B.)FIN3100 just paid a dividend of $6.00, i.e., D0 = $6.00. The dividend is expected to grow by 100% during Year 1, by 50% during Year 2, and then at a constant rate of 7% thereafter. If Silva's required rate of...

PPG is expected to earn $4 per share in one year. The market demand for the...

PPG is expected to earn $4 per share in one year. The market demand for the new product is expected to be high so PPG decides to retain 60% of its earnings in year 1, 2, and 3. The reinvestments are expected to generate 10% return. Starting from year 4, PPG will maintain an 60% dividend payout rate because the investment return is expected to decline to 5% due to increased competition from similar products. (round to two decimal places...

. PPG is expected to earn $4 per share in one year. The market demand for...

. PPG is expected to earn $4 per share in one year. The market demand for the new product is expected to be high so PPG decides to retain 60% of its earnings in year 1, 2, and 3. The reinvestments are expected to generate 10% return. Starting from year 4, PPG will maintain an 60% dividend payout rate because the investment return is expected to decline to 5% due to increased competition from similar products. (round to two decimal...

1. RRR Co. just paid a dividend of $1.15 per share. The dividend is expected to...

1. RRR Co. just paid a dividend of $1.15 per share. The dividend is expected to grow by 40% next year, 20% in both Years 2 & 3, 10% in Year 4, and then grow at a constant rate of 4% thereafter. The required rate of return is 8.5%. Compute the selling price of the stock.

Q:Forever 21 is expected to pay an annual dividend of $2.24 per share in one year,...

Q:Forever 21 is expected to pay an annual dividend of $2.24 per share in one year, which is then expected to grow by 8% per year. The required rate of return is 14%. A:What is the current stock price? B:What is the current stock price if the annual dividend of $2.24 has just been paid? (i.e. paid yesterday or earlier today) C:What is the current stock price if the annual dividend of $2.24 his about to be paid? (i.e. paid...

XYZ stock has an expected ROE of 10%per year， expected earnings per share of$5， and expected...

XYZ stock has an expected ROE of 10%per year， expected earnings per share of$5， and expected dividends of$2per share.Its market capitalization rate is 12%per year. a. What are the firm's price and price-earnings ratio?(10%) b.If the firm increases its plow back ratio to 0.8， what would be its price and price- earnings ratio?(5%) Compare the results of(a) and(b) to explain the effect of the plow back ratio on the price-earnings ratio.

1. Forever 21 is expected to pay an annual dividend of $3.28 per share in one...

1. Forever 21 is expected to pay an annual dividend of $3.28 per share in one year, which is then expected to grow by 4% per year. The required rate of return is 14%. a. What is the current stock price? b. What is the current stock price if the annual dividend of $3.28 has just been paid? (i.e. paid yesterday or earlier today) c. What is the current stock price if the annual dividend of $3.28 his about to...

A stock was purchased for Ghc40 per share and sold for Ghc50 per share one year...

A stock was purchased for Ghc40 per share and sold for Ghc50 per share one year later. In the course of the year the company paid a dividend of Ghc2 per share. Calculate the return on the investment Calculate the dividend yield on the investment Calculate the capital gains yield on the investment

The Timberlake Orchard Co just paid a dividend of $7 per share. The dividend is expected...

The Timberlake Orchard Co just paid a dividend of $7 per share. The dividend is expected to grow at a rate of 5% for the next three years. In year four and five it will grow at a rate of 4% per year. The growth rate of dividend is expected to be constant 6 percent indefinitely from year six. The required rate of return is 13 percent. What is the current share price? (Show all your computations) Rubrics: 1. Correct...

Question