Reference no: EM133103841

Question 1 - Big Plans Co, a no-growth company, has a required rate of return of 9.59 percent. The company has earnings per share of $2.02. Calculate a theoretical (justified) P/E ratio.

Question 2 - Big Success Co, a no-growth company, has a required rate of return of 14.29 percent. The company has earnings per share of $2.12. Calculate intrinsic value of the stock.

Question 3 - Blue Crab Co is a constant-growth company that pays out 39 percent of its earnings as dividends and is expected to grow at 4.38 percent. The company has a required return of 9.53 percent. The last year's earnings were $2.51 per share. Calculate a justified P/E of the company.

Question 4 - Red Carpet Co is a constant growth company that pays out 46 percent of its earnings as dividends and is expected to grow at 4.14 percent. The company has a required return of 12.45 percent. The last year's earnings were $2.27 per share. Calculate intrinsic value of the company's stock.

Question 5 - A company currently has $4.03 earnings per share of which $1.51 is paid in annual dividends per share. If the growth rate for the firm is 4.99 percent per year and the required return is 14.29 percent, what is the theoretical (justified) P/E ratio?

Question 6 - Pink Rose Co is a constant-growth company that pays out 38 percent of its earnings as dividends and is expected to grow at 3.90 percent. The company has a required return of 6.09 percent. Calculate PEG ratio of the company.