Question
In: Finance
Calculate what you think the share price for company X should be given the following information...
Calculate what you think the share price for company X should be
given the following information and modelling firm value as a
perpetuity with growth: Cash Flow From Operations= 15,500m
Capital Expenditure= 4,600m
Interest Expense= 950m Corporate
Tax= 30% Growth rate = 2% every year
Cash on Balance Sheet = 6,200m
Number of Shares = 5,000m
Total Debt = 8,000m
Total Equity= 90,000m
Cost of Equity re= 9.5%
Cost of Debt rd = 4%
If the share currently costs $12 in the market, what action would
you take?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Calculate what you think the share price for company X should be given the following information...
Calculate what you think the share price for company X should be
given the following information and modelling firm value as a
perpetuity with growth:
Cash Flow From Operations= 15,500m
Capital Expenditure= 4,600m
Interest Expense= 950m
Corporate Tax= 30%
Growth rate = 2% every year
Cash on Balance Sheet = 6,200m
Number of Shares = 5,000m
Total Debt = 8,000m
Total Equity= 90,000m
Cost of Equity re= 9.5%
Cost of Debt rd = 4%
If the share currently costs $12...
Calculate the current price per share (P0) for Olson Corporation, given the following information. The data...
Calculate the current price per share (P0) for Olson
Corporation, given the following information. The data all pertain
to the year just ended.
Sales =
100,000 units
Sales
price per
unit =
$100.00
Variable
cost per
unit =
$70.00
Fixed
cost
=
$100,000
Debt
outstanding =
$500,000
Interest
rate on debt
=
10 percent
Tax
Rate =
40 percent
Common
stock shares
outstanding =
100,000 shares
Beta =
1.2
kRF
= 2 percent
kM
= 8 percent
Pay-out
ratio =
30 percent
Growth
rate in earnings
and...
M/B AND SHARE PRICE You are given the following information: Stockholders' equity as reported on the...
M/B AND SHARE PRICE
You are given the following information: Stockholders' equity as
reported on the firm’s balance sheet = $5 billion, price/earnings
ratio = 13, common shares outstanding = 38 million, and market/book
ratio = 1.5. Calculate the price of a share of the company's common
stock. Round your answer to the nearest cent.
You are given the following information concerning the share price and returns for Cubic Technologies Ltd:...
You are given the following information concerning the share
price and returns for Cubic Technologies Ltd:
Day
Share Price
Return
Day
Share Price
Return
1
230
7
233
-0.104
2
250
0.087
8
221
-0.052
3
232
-0.072
9
201
-0.090
4
241
0.039
10
218
0.085
5
247
0.025
11
219
0.005
6
260
0.053
12
227
0.037
1.1Determine and describe the trading behaviour of an investor
who follows the Dow Theory which recommends investing in securities
when the...
Given the following price and dividend information: A. calculate the sample variance for the returns. (Round...
Given the following price and dividend information:
A. calculate the sample variance for the returns. (Round to 4
decimals)
B. calculate the arithmetic average return. (Round to 4
decimals)
C.calculate the geometric average return. (Round to 4
decimals)
D.calculate the sample standard deviation for the returns.
(Round to 4 decimals)
Year
Price
Dividend
0
50.72
1
43.54
1.75
2
49.22
2.10
3
51.30
2.20
4
52.45
2.50
5
56.35
2.75
Given the following information, calculate the price elasticity of demand and use it to project how...
Given the following information, calculate the price elasticity
of demand and use it to project how the consumer's quantity
demanded and expenditure will change in response to a future price
increase. Conclude by identifying what your findings suggest about
how effective taxing this good would be for a government trying to
raise revenue or change behavior. % change (growth rate) = (value
new - value old) / value oldElasticity = |% change in quantity / %
change in price| Milk...
Suppose that you are given the following information about the stock price/dividends for a company: Year...
Suppose that you are given the following information about the
stock price/dividends for a company:
Year
Beginning of Year Price
Dividend Paid at Year-End
2016
$80
$3
2017
$85
$4
2018
$78
$2
2019
$82
$2
If the company's stock price is $85 per share at the end of
2019, what is the arithmetic average return for an investment in
XYZ over the period? What is the geometric average return for an
investment in XYZ over the period? (Do not...
You are given the following information about a company. The company pays no dividends. What is...
You are given the following information about a company. The
company pays no dividends. What is the company’s WACC?
Debt:
Common Stock: Market:
90,000 bonds with a par value of $2,000 and a quoted price of
108.40. The bonds have coupon rate of 5.3 percent and 20 years to
maturity. 40,000 zero coupon bonds with a quoted price of 29.15, 25
years to maturity, and a par value of $10,000. Assume semiannual
coupon payments.
5.5 million shares of stock selling...
Given the following price and dividend information: A. calculate the holding period return. (Round to 4...
Given the following price and dividend information:
A. calculate the holding period return. (Round to 4
decimals)
B. calculate the $1 investment equivalent. (Round to 4
decimals)
C.calculate the probability of losing money. (Round to 4
decimals)
Year
Price
Dividend
0
50.72
1
43.54
1.75
2
49.22
2.10
3
51.30
2.20
4
52.45
2.50
5
56.35
2.75
a. Calculate price elasticity given the following information. Is the curve elastic, inelastic or unitary elastic?...
a. Calculate price elasticity given the following information.
Is the curve elastic, inelastic or unitary elastic? Original
Quantity:9800 lbs of coffee New Quantity: 6500 lbs of coffee
Original Price: $10.99/lb New Price: $9.99/lb b. (6 pts) Given the
elasticity calculated in part a, will the seller increase or
decrease their revenue if they increase the price of coffee? c. (8
pts) Explain the determinants of elasticity.
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