Halliford Corporation expects to have earnings this coming year of $3.09 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $3.09 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 49% of its earnings. It will then retain 21% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.42% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 10.6%, what price would you estimate for Halliford stock?

Expert Solution

jeff jeffy answered 2 years ago

Halliford Corporation expects to have earnings this coming year of $3.307 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $3.307 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 48% of its earnings. It will retain 17%. of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 20.2% per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $3.000 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $3.000 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% of its earnings. It will retain 20% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 25.0% per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $3.199 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $3.199 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 46% of its earnings. It will retain 18% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 27.3% per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $2.873 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $2.873 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 46% of its earnings. It will retain 18% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 20.1% per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $2.908 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $2.908 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% of its earnings. It will retain 18% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 27.4% per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $ 3.283 per share. Halliford plans...

Halliford Corporation expects to have earnings this coming year of $ 3.283 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 45 % of its earnings. It will retain 17 % of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 24.5 % per year. Any earnings that are not retained will...

Halliford corporation expects to have earnings this coming year of $3.168 per share. Halliford plans to...

Halliford corporation expects to have earnings this coming year of $3.168 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 45% of its earnings. It will retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 23.2 per year. Any earnings that are not retained will be paid out as...

Halliford Corporation expects to have earnings this coming year of $ 3.291$ per share. Halliford plans...

Halliford Corporation expects to have earnings this coming year of $ 3.291$ per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent twoyears, the firm will retain49 % of its earnings. It will retain 22 % of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 27.7 % per year. Any earnings that are not retained will be paid...

Halliford Corporation expects to have earnings this coming year of $ 2.99 per share. Halliford plans...

Halliford Corporation expects to have earnings this coming year of $ 2.99 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 50 % of its earnings. It will then retain 22 % of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 18.25 % per year. Any earnings that are not retained will...

Halliford Corporation expects to have earnings this coming year of $2.98 per share. Halliford plans to...

Halliford Corporation expects to have earnings this coming year of $2.98 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 53% of its earnings. It will then retain 20% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.69% per year. Any earnings that are not retained will be paid out as...

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