Question
In: Finance
Company Z-prime’s earnings and dividends per share are expected to grow by 4% a year. Its...
Company Z-prime’s earnings and dividends per share are expected to grow by 4% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year’s dividend is $9, the market capitalization rate is 9% and next year’s EPS is $14. What is Z-prime’s stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
My guess was: $153.42 and this WAS NOT CORRECT
Solutions
jeff jeffy answered 2 months agoRelated Solutions
Company Z-prime’s earnings and dividends per share are expected to grow by 3% a year. Its...
Company Z-prime’s earnings and dividends per share are expected
to grow by 3% a year. Its growth will stop after year 4. In year 5
and afterward, it will pay out all earnings as dividends. Assume
next year’s dividend is $9, the market capitalization rate is 11%
and next year’s EPS is $16. What is Z-prime’s stock price?
(Do not round intermediate calculations. Round your answer
to 2 decimal places.)
Part 1 Company Z-prime’s earnings and dividends per share are expected to grow by 2% a...
Part 1
Company Z-prime’s earnings and dividends per share are expected
to grow by 2% a year. Its growth will stop after year 4. In year 5
and afterward, it will pay out all earnings as dividends. Assume
next year’s dividend is $10, the market capitalization rate is 12%
and next year’s EPS is $17. What is Z-prime’s stock price?
(Do not round intermediate calculations. Round your answer
to 2 decimal places.)
Part 2
Company's Z's earnings and dividends per...
Company Z's earnings and dividends per share are expected to grow indefinitely by 2% a year.
Company Z's earnings and dividends per share are expected to grow indefinitely by 2% a year. If next year's dividend is $7 and the market capitalization rate is 11%, what is the current stock price?
Company ABC's earnings per share this year are $5. ABC's earnings are expected to grow at...
Company ABC's earnings per share this year are $5. ABC's
earnings are expected to grow at rate g every year. The return that
investors expect on ABC is 10%. ABC's current (ex-dividend) stock
price is $80. ABC's payout ratio is 0.4.
(a) Determine rate g.
(b) Determine the present value of ABC's growth
opportunities.
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 4% per...
The earnings, dividends, and stock price of Shelby Inc. are
expected to grow at 4% per year in the future. Shelby's common
stock sells for $28.75 per share, its last dividend was $2.50, and
the company will pay a dividend of $2.60 at the end of the current
year.
a. Using the discounted cash flow approach, what is its cost of
equity? Round your answer to two decimal places.
b. If the firm's beta is 0.9, the risk-free rate is...
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 4% per...
The earnings, dividends, and stock price of Shelby Inc. are
expected to grow at 4% per year in the future. Shelby's common
stock sells for $23 per share, its last dividend was $2.50, and the
company will pay a dividend of $2.60 at the end of the current
year.
Using the discounted cash flow approach, what is its cost of
equity? Round your answer to two decimal places.
%
If the firm's beta is 1.8, the risk-free rate is 7%,...
Assume a company you are analyzing is expected to grow its earnings and dividends at a...
Assume a company you are analyzing is expected to grow its
earnings and dividends at a constant rate in the foreseeable future
(forever). How will you find the intrinsic value of your
stock? This answer requires multiple steps and concepts
The FI Corporation’s dividends per share are expected to grow indefinitely by 5% per year.
The FI Corporation’s dividends per share are
expected to grow indefinitely by 5% per year. a. If this year’s
year-end dividend is $12.00 and the market capitalization rate is
10% per year, what must the current stock price be according to the
DDM? b. If the expected earnings per share are $18.00, what is the
implied value of the ROE on future investment opportunities? (Round
your answer to 2 decimal places.) c. How much is the market paying
per share for growth opportunities...
FI Corporation’s dividends per share are expected to grow indefinitely by 5% per year. a. If...
FI Corporation’s dividends per share are expected to grow
indefinitely by 5% per year. a. If this year’s year-end dividend is
$12.00 and the market capitalization rate is 10% per year, what
must the current stock price be according to the DDM? b. If the
expected earnings per share are $18.00, what is the implied value
of the ROE on future investment opportunities? (Round your answer
to 2 decimal places.) c. How much is the market paying per share
for...
The FI Corporation’s dividends per share are expected to grow indefinitely by 6% per year. a....
The FI Corporation’s dividends per share are expected to grow
indefinitely by 6% per year.
a. If this year’s year-end dividend is $8.00
and the market capitalization rate is 10% per year, what must the
current stock price be according to the DDM?
b. If the expected earnings per share are
$16.00, what is the implied value of the ROE on future investment
opportunities? (Round your answer to 2 decimal
places.)
c. How much is the market paying per share...
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