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At the end of the year 2016 Brown Bear Corporation paid dividends $4.12 per share. The company projects the following annual growth rates in dividends:
Year Growth Rate
2017 14%
2018 14%
2019 14%
2020 9%
2021 6%
2022 4%
From year 2023 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 12.37%.
Calculate the economic value of the stock now (end of the Year 2016).
Green Company's common stock is currently selling for $79.05 per share. Last year, the company paid dividends of $3.39 per share. The projected growth at a rate of dividends for this stock is 2.72 percent. Which rate of return does the investor expect to receive on this stock if it is purchased today?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box).
You decide to buy 1,500 shares of stock at a price of $62 and an initial margin of 80 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 40 percent?
Two companies have the same cost of equity and after tax cost of debt. What needs to be true regarding the cost of debt as compared to cost of equity for the WACC of the higher leverage firm to be higher than that of the lower leverage firm?and why?
Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis.
At time =0 an engineer deposited $10000 into an account that pays interest at 8% per year,, compounded quarterly. If she withdrew $1000 in months 2, 11, and 23, what was the total value of the account at the end of 2 years? Assume NO inter period com..
Broussard Skateboard's sales are expected to increase by 15% from $7.4 million in 2015 to $8.51 million in 2016. Its assets totaled $5 million at the end of 2015. Broussard is already at full capacity, so its assets must grow at the same rate as proj..
Explain how the Black-Scholes option pricing model builds on the binomial model. Where does it make extensions? Where is it similar?
What are the after-tax cash flows for the company?
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Suppose a banker observed the following direct spot quotations for dollars and euros.
A stock is expected to pay a dividend of $1.00 next year and $1.50 in 2 years, after that the dividend is expected to grow at a constant rate of 4% per year forever. The stock s required rate of return is 11%. What is intrinsic value of the stock tod..
Hailey, Inc., has sales of $19,720, costs of $9,310, depreciation expense of $1,980, and interest expense of $1,470. Assume the tax rate is 40 percent. What is the operating cash flow, or OCF?
The nominal annual interest rate was 5%. What was his monthly loan payment?
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