Question
In: Finance
VolCal in at the end of the year is expected to have EPS of $5 the...
VolCal in at the end of the year is expected to have EPS of $5 the
firm has a cost of capital of 12% currently pay out of all earnings
as a divident using the assumption of perfect capital markets
a.
43.7550
b.
58.8235
c.41.666
d.50.2575
e.40.0000
f.45.4545
Solutions
Expert Solution
Price of the share=D1/r
Where D1= Dividend next year and r= Cost of capital (given as 12%)
Since payout is 100%, D1= Expected EPS (given as $5)
Hence share price= $5/0.12 = $41.666
Answer is choice c given.
jeff jeffy answered 2 years agoRelated Solutions
VolCal in at the end of the year is expected to have EPS of $5 the...
VolCal in at the
end of the year is expected to have EPS of $5 the firm has a cost
of capital of 19% currently pay out of all earnings as a divident
using the assumption of perfect capital markets
using the dividend discount model what is the firms expected
stock price today?
a. 43.7750
b.58.8835
c.41.666
d.50.2575
e.40.0000
f.45.4545
g. 0%
h. 2%
I 1%
j. 3%
k.60.2675
VolCal in at the end of the year is expected to have EPS of $5 the...
VolCal in at the
end of the year is expected to have EPS of $5 the firm has a cost
of capital of 19% currently pay out of all earnings as a divident
using the assumption of perfect capital markets
what is the firms current growth rate?
a. 43.7750
b.58.8835
c.41.666
d.50.2575
e.40.0000
f.45.4545
g. 0%
h. 2%
I 1%
j. 3%
k.60.2675
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e.40.0000
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e.40.0000
f.45.4545
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I 1%
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