Question
In: Finance
Year Dividend 2007 $ 0.02 2008 $ &nbs
| Year | Dividend | ||
| 2007 | $ 0.02 | ||
| 2008 | $ 0.03 | ||
| 2009 | $ 0.04 | ||
| 2010 | $ 0.05 | ||
| 2011 | $ 0.06 | ||
| current stock price | $10.00 | ||
| Number of stock shares | 400,000 | ||
| Debt/Equity ratio | 0.75 | ||
| Interest Paid | 240,000 | ||
| tax rate | 36% | ||
| Part A. Estimate the constant annual compounding growth rate based on the dividends 2007 through 2011. | |||
| Growth rate | |||
| Part B. Use the Gordon dividend model to estimate the cost of equity | |||
| Cost of equity | |||
| B. Calculate the WACC | |||
| Cost of debt | |||
| WACC | |||
Solutions
Expert Solution
THE WAY THE YELLOW CELLS ARE GIVEN , I HAVE ASSUMED THAT
IT IS FULLY EXCEL PRESENTATION. SO I HAVE SOLVED FULLY USING EXCEL.
I HAVE GIVEN CELL REFERENCES AS WELL SO THAT IT IS EASY TO
UNDERSTAND. THANK YOU
jeff jeffy answered 2 years agoRelated Solutions
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Dividend $ 7.46 $ 7.91...
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Dividend
$ 7.46
$ 7.91
$ 8.38
$ 8.80
$ 9.24
$ 9.70
$ 10.28
$ 10.79
$ 11.33
$ 12.01
Find both the arithmetic growth rate and the geometric growth
rate of the dividends for Davy's Crock Pot Stores. Assuming the
January 1, 2011 price of the stock is $110.00, determine the
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growth rate to calculate the...
Donellys, Inc. has prepared the following comparative balance sheets for 2007 and 2008: 2008 2007 Cash...
Donellys, Inc. has prepared the following comparative balance
sheets for 2007 and 2008: 2008 2007 Cash $ 297,000 $ 153,000
Receivables 159,000 107,000 Inventory 150,000 180,000 Prepaid
expenses 18,000 27,000 Plant assets 1,260,000 1,050,000 Accumulated
depreciation (450,000) (375,000) Patent, net (intangible asset)
153,000 174,000 $1,587,000 $1,316,000 Accounts payable $ 153,000 $
168,000 Accrued liabilities 60,000 42,000 Bonds payable 0 450,000
Preferred stock 645,000 0 Common stock 600,000 600,000 Retained
earnings 129,000 56,000 $1,587,000 $1,316,000 1. The Accumulated
Depreciation account has...
End of Year Stock Price $ Returns % 2007 $ 20.91 ------- 2008 14.06 -32.76% 2009...
End of Year
Stock Price $
Returns %
2007
$ 20.91
-------
2008
14.06
-32.76%
2009
24.81
76.46
2010
35.57
43.37
2011
32.58
-8.41
2012
48.02
47.37
2013
67.43
40.42
2014
51.26
-23.98
2015
36.91
-27.99
2016
47.71
29.26
2017
44.55
-6.62
I received that correct answers, however I do not know how to
solve them. Please write out equations for calculator use. Thank
you.
a.) What is the average return?
ANSWER: 13.71%
How do you get that? Show Work....
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Year: 2007 2008 2009 2010 2011 2012
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Consider the data in the following table: Year 2004 2005 2006 2007 2008 2009 Stock A...
Consider the data in the following table:
Year
2004
2005
2006
2007
2008
2009
Stock A
-10%
20%
5%
-5%
2%
9%
Stock B
21%
7%
30%
-3%
-8%
25%
Use the above information to answer the following questions.
Round your answers to four decimal places (i.e. 0.0105).
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2. Estimate the average return for stock B.
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5 .Estimate the...
A company incurs the following costs on a particular project: Year 2006 2007 2008 Total Costs...
A company incurs the following costs on a particular
project:
Year
2006
2007
2008
Total
Costs incurred ($ ‘000)
500
700
300
1,500
The total revenue from the project is expected to be $2,000,000.
Under the percentage-of-completion method, the project’s net income
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Group of answer choices
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b. $100,000
c. $600,000
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Year A
B
0 -8,000 -8,000
1 4,500 1,900
2 4,200 3,000
3 1,800 4,000
4 1,600 5,000
Which project would you select if you used the payback, NPV and IRR
methods using a 15% discount rate and why?
Year A &nbs
Year A B
0 -75,000 -75,000
1 40,000
10,000
2 27,000
15,200
3 20,000 67,967
By how much should the cost of capital (discount rate) for the
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During the 2007-2008 school year, approximately p = 0.64 of principals in Florida public schools were...
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a. Step 1:...
This is a tableau question. Year Sales 2005 49387 2006 53412 2007 56783 2008 58436 2009...
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Year
Sales
2005
49387
2006
53412
2007
56783
2008
58436
2009
59994
2010
61515
2011
63182
2012
67989
2013
70448
2014
72601
2015
75482
2016
78341
2017
81111
2018
82517
2019
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2020
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I. (a) Determine the trend line using both linear and two
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