In: Finance
3. A financial analyst recommends purchasing DUDDZ, Inc. at $24.49. The stock pays a $1.60 dividend which is expected to grow annually at 4 percent. If you want to earn 10 percent on your funds, is this a good buy based on the dividend-growth model?
4. If the risk-free rate is 2.3 percent and the anticipated return on the market is 9.0 per-cent, what is the value of the stock in Problem 1, if the beta coefficient is 0.92?
5. If the risk-free rate is 2.3 percent and the anticipated return on the market is 9.0 per-cent, what is the value of the stock in Problem 1 if the beta coefficient is 1.23
6. Given the following information, compute the following ratios: price/earnings, price/ book, price/sales, and PEG.
Sales $10,000
Earnings $1,500
Total assets $5,000
Equity $2,000
Number of shares outstanding1,000
Estimated growth rate of earnings 6%
Price of the stock $20
Hi all,
Please find attached a screenshot which should help you with the concept and solution.
Hope it helps. Thanks and all the best.