Their new task consisted of determining Entergy Corp.’s value in common stock, preferred stock, and bonds. With this information, they were to prepare a second seminar to explain the valuation process to the clients

Nicholas and Karina were able to obtain the following information in regard to Entergy Corp.’s long term obligations. The table indicates the first three first-mortgage bonds listed in the Annual Report.

Table 1

Nicholas and Karina concluded that the effect of increased concern in regards to any event risk, was to lower Entergy Corp.’s cost of bond financing. The following information was gathered through the use of Value Line Survey.

Entergy’s recent price was $38 per share with a P/E of 14.6 and a dividend yield of 4.8%. Its beta was .60.

Earnings Per Share

Quarterly Dividends Paid Per Share

FMS SECURITIES CASE B - Questions

1.) Entergy Corp. has $54,956,000 of preferred stock outstanding.

a.) Suppose its Series A, which has a $100 par value and pays a 4.32 percent cumulative dividend, currently sells for $48.00 per share. What is its nominal expected rate of return? It’s effective annual rate of return? (Hint: Remember that dividends are paid quarterly. Also, assume that this issue is perpetual.)

b.) Suppose a Series F, with a $100 par value and a 9.75 percent cumulative dividend, has a mandatory sinking fund provision. 60,000 of the 300,000 total shares outstanding must be redeemed annually at par beginning at the end of 2004. If the nominal required rate of return is 8.0 percent, what is the current (January 1, 2004) value per share?

2.) Now consider Entergy Corp.’s common stock. Value Line estimates Entergy Corp.’s 5- year dividend growth rate to be 6.0 percent. Assume that Entergy Corp.’s stock traded on January 1, 2003 for $22.26. Assume for now that the 6.0 percent growth rate is expected to continue indefinitely.

a.) What was Entergy Corp.’s expected rate of return at the beginning of 2003? Value Line estimate Entergy Corp.’s dividends to be $1.80 at the start of 2003.

b.) What was the expected dividend yield and expected capital gains yield on January 1,

2003? Describe the relationship between dividend yield and capital gains yield over time under constant growth assumptions.

3.) What conditions must hold to use the constant growth (Gordon) model? Do many “real world” stocks satisfy the constant growth assumptions?

4.) Suppose you believe that Entergy Corp.’s 6.0 percent dividend growth rate will only hold

5 years. After that, the dividend growth rate will return to Entergy Corp.’s historical 10-year

average of 7.5 percent. Note that D6 = D5 x 1.075. (Use to answer questions 4-8)

a.) What was the value of Entergy Corp.’s stock on January 1, 2003 (the end of 2002), if the required rate of return is 13.5 percent? Remember this value you calculate does

not have to agree with the market value of $22.26.

5.)

a.) What is the expected stock price at the end of 2003 (beginning of 2004) assuming

that the stock is in equilibrium?

b.) What is the expected stock price at the end of 2004 (beginning of 2005) assuming

that the stock is in equilibrium?

6.) What is the expected dividend yield, capital gains yield, and total return for 2003?

Hint: You need the expected January 1, 2003 price to compute.

7.) Suppose Entergy Corp.’s dividend was expected to remain constant at $1.80 for the next 5 years and then grow at a constant 6 percent rate. If the required rate of return is 13.5 percent, would Entergy Corp.’s stock value be higher or lower than your answer in Problem 4?

8.) Entergy Corp.’s stock price was $22.26 at the beginning of 2003. Using the growth rates given in the introduction to this question, what is the stock’s expected rate of

return?

9.) Based on the information provided in Value-Line Tables is the assumed 6 % growth rate reasonable? What has been the trend?

10.) Given Value-Line’s ROE estimated for 2005 through 2007 and at the projected

earnings and dividends per share for the same period.

1. Could those figures be used to develop an estimated long-run “sustainable” growth rate?

2. Does this figure support the 7.5 percent growth rate given in the problem?

Hint: Think of the formula g = br = (Retention ratio)(ROE)

the Brewster angle for a certain media boundary is 33°. what is th me critical angle for total internal reflection for the same boundary?

Hello! I have some questions related to using Ansys Fluent, I have read the instruction of Ansys Book , but I still do not understand clearly, can you help me? They are as the following:
1. When do we need to use pressure inlet for B.C for the inlet boundary and pressure outlet B.C for the outlet boundary?

2. Can we use pressure inlet B.C for the inlet boundary and outlet B.C for the outlet boundary in one fluid flow study (air flow, gas flow..)? The reason why I ask this question because I used to see on the internet written that if we use pressure inlet B.C for the inlet boundary, we are not recommended to use pressure outlet B.C for the outlet boundary, we are recommended to use velocity outlet B.C for the outlet boundary. Is it right or not?

3. Does the operating pressure in the operating condition effect the gauge pressure in the pressure outlet/ inlet ?

4. In the wall B.C, what does it mean if I choose the stationary wall or the moving wall? Sorry, I have read the instruction of ansys, but I still do not get it.

Thank you in advance! I will thumb you up!

Please rewrite the following and also add more details

Buber was responding to the view of Christians. I think his criticism is valid. Nowadays people are going to church for the people or special occasions. People aren't going to church with the mindset that they are there to get closer to God. They are there because they think they have to be. Only one day of the week people get dressed up to go to church and feel like that's enough. There are six other days of the week that you could be spending trying to get to know God more. Being in church doesn't automatically give you that close relationship. If you are truly religious, then just going to church for show or the excitement, isn't enough. You have to try to put in more effort. They are so busy focusing on the wrong things and not putting in more time for God. Rather they are putting on a show for man.

1.. Suppose $2000 is invested at 6% annual interest rate for 10 years and the interest is compounded monthly. How much will the investment be worth at the end of the 10 years?

2. Suppose John invests his tax refund of $1666 in an account that earns interest compounded continuously at the rate of 3.5%. How much will John have in 7.5 years? Show your work details.

3. What is the present value of an account that will be worth $10,000 in 5 years if the annual interest rate is 10% and the interest is compounded continuously? Show your work details.

4.A company shows the following profit figures for the years 2000, 2004, and 2008. In 2000 the profit was $250 million; in 2004, the profit was $400 million; and, in 2008, the profit was $550 million. If x is the number of years after 2000, write a linear function representing this profit. Using this linear model determine what the projected profit will be in the year 2020. Show work details.

5. The table shows the year and the number of people unemployed in a particular city for several years. Determine whether the trend appears to be approximately linear. If so, and assuming the trend continues, in what year will the number of unemployed reach 15 people?

Year                          1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Number Unemployed 750   670   650   605   550   510   460   420   380   320

6. Wilbur and Cody are selling pies for a school fundraiser. Customers can buy cherry pies and blackberry pies. Wilbur sold 8 cherry pies and 2 blackberry pies for a total of $110. Cody sold 7 cherry pies and 6 blackberry pies for a total of $177. What is the cost each of one cherry pie and one blackberry pie? Show work details.

The investment committee of your church has come to you for advice one of the stocks held by the church has paid cash dividends for years. This year the company issues a stock dividend so that the church received additional shares rather than cash. The committee is concerned about whether this stock dividend is really worth anything. One committee member argues the stock dividend is as good as cash; another argues that the dividend is worthless.

Write a brief report to the committee explain the difference between a cash dividend and a stock dividend. Evaluate the value of stock dividend compared with the cash dividend the church has received in prior years.

In a state machine diagram with composite states, what is the meaning of a transition that goes from the boundary of a state? What is the meaning of a transition that goes to the boundary of a state?

In a state machine diagram with composite states, what is the meaning of a transition that goes from the boundary of a state? What is the meaning of a transition that goes to the boundary of a state?

compare the following companies in terms of both horizontal boundary and vertical boundary (i) taiwan's htc (ii) america's apple and (iii)korea's samsung