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In: Finance
Restful RVs Inc. (RRV) is presently enjoying relatively high growth because of a surge in the...
Restful RVs Inc. (RRV) is presently enjoying relatively high growth because of a surge in the demand for recreational vehicles. Management expects earnings and dividends to grow at a rate of 35% for the next 4 years, after which high gas prices will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last paid dividend, D0, was $1.95. RRV’s beta is 1.50, the market risk premium is 5.75%, and the risk-free rate is 3.00%. What is the intrinsic value of RRV’s common stock? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Solutions
jeff jeffy answered 9 months agoRelated Solutions
Restful RVs Inc. (RRV) is presently enjoying relatively high growth because of a surge in the...
Restful RVs Inc. (RRV) is presently enjoying relatively high
growth because of a surge in the demand for recreational vehicles.
Management expects earnings and dividends to grow at a rate of 35%
for the next 4 years, after which high gas prices will probably
reduce the growth rate in earnings and dividends to zero, i.e., g =
0. The company’s last paid dividend, D0, was $2.25. RRV’s beta is
1.50, the market risk premium is 4.75%, and the risk-free rate...
KEF Inc. is presently enjoying relatively high growth because of a surge in the demand for...
KEF Inc. is presently enjoying relatively high growth because of
a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 20% for the next 3
years, after which competition will probably reduce the growth rate
in earnings and dividends to 10% and its constant forever. The
company’s last dividend, D , was $1.25, its beta is 1.20, the
market risk is 14.00%, and the risk-free rate is 3.00%. What is...
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Church Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 2.8% for the next 4
years, after which competition will probably reduce the growth rate
in earnings and dividends to zero, i.e., g = 0. The company’s most
recent dividend, D0, was $2.69, and its required rate of return is
15%. What is the expected Horizon Value at t=4?
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Church Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 2.8% for the next 4
years, after which competition will probably reduce the growth rate
in earnings and dividends to zero, i.e., g = 0. The company’s most
recent dividend, D0, was $2.69, and its required rate of return is
15%. What is the current price of the common stock?
Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Everest Inc. is presently enjoying relatively high growth
because of a surge in the demand for its new product. Management
expects earnings and dividends to grow at a rate of 34% for the
next 2 years, 21.45% in year 3 and 4 and after which competition
will probably reduce the growth rate in earnings and dividends to
constant growth rate of 6.50%. The company’s last dividend was
$1.75, its beta is 1.15, the market risk premium is 9.70%, and the...
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Church Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 3.4% for the next 4
years, after which competition will probably reduce the growth rate
in earnings and dividends to zero, i.e., g = 0. The company’s most
recent dividend, D0, was $4.07, and its required rate of
return is 12%. What is the expected Horizon Value at
t=4?
Bells Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Bells Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 35% for the next 2
years, after which competition will probably slow down the growth
rate in earnings and dividends to 15% for year 3 and year 4. After
year 4, growth should be a constant 8% per year. The company’s last
dividend, D0, was $1.25. The firm's required return...
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Church Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 22% for the next 4
years, after which competition will probably reduce the growth rate
in earnings and dividends to zero, i.e., g = 0. The company’s last
dividend, D0, was $1.25, its beta is 1.20, the market risk premium
is 5.50%, and the risk-free rate is 3.00%. What is...
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Church Inc. is presently enjoying relatively high growth because
of a surge in the demand for its new product. Management expects
earnings and dividends to grow at a rate of 3.4% for the next 4
years, after which competition will probably reduce the growth rate
in earnings and dividends to zero, i.e., g = 0. The company’s most
recent dividend, D0, was $1.68, and its required rate of
return is 12%. What is the expected Horizon Value at t=4?
And...
Renata Inc. is presently enjoying relatively high growth because of a surge in the demand for...
Renata Inc. is presently enjoying relatively high growth
because of a surge in the demand for its new product. Management
expects earnings and dividends to grow at a rate of 22% for the
next 4 years, after which competition will probably reduce the
growth rate in earnings and dividends to zero, i.e., g = 0. The
company’s last dividend, D0, was
$1.25, its beta is 1.20, the market risk premium is 5.50%, and the
risk-free rate is 3.00%. What is...
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