Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Beasley Ball Bearings paid a dividend of $4 last year. The dividend is expected to grow at a constant rate of 3 percent over the next five years. The required rate of return is 11 percent (this will also serve as the discount rate in this problem). Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the anticipated value of the dividends for the next four years. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Anticipated Value D1 $ D2 $ D3 $ D4 $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 11 percent. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) PV of Dividends D1 $ D2 D3 D4 Total $ c. Compute the price of the stock at the end of the fourth year (P4). (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Stock price at Year 4 $ d. Calculate the present value of the year 4 stock price at a discount rate of 11 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value of Year 4 stock price $ e. Compute the current value of the stock. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Current value $ f. Use the formula given below to show that it will provide approximately the same answer as part e. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) P0 = D1 Ke − g Current value $ g. If current EPS were equal to $5.15 and the P/E ratio is 1.2 times higher than the industry average of 9, what would the stock price be? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Stock price $ h. By what dollar amount is the stock price in part g different from the stock price in part f? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Amount $ i. In regard to the stock price in part f, indicate which direction it would move if: (1) D1 increases (2) Ke increases (3) g increases
What is the internal rate of return on an investment with the following cash flows? Year Cash Flow
Greener Grass Co. pays a constant annual dividend of $1 a share and has 1,000 shares of common stock outstanding. The company: must always show a current liability on its balance sheet of $1,000 for dividends payable.
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. What is the equivalent annual savings from the purchase..
You have been given the expected return data shown in the first table on 3 assets- F, G and H over the period 2016-2019. Calculate the expected return over the 4 year period for each of the alternatives. Calculate the standard deviation of returns ov..
Jute Corporation's common stock has a beta of 1.1. The risk free rate is 3% and the market return is 7%. The company announces that starting next year it will pay a dividend of $13 forever. What is the estimated share price now? Compared to Google___..
Please research Negative interest rate (NIRP) or Zero interest rate (ZIRP) policies and explain the following; How does this affect the bond market? Who wins and who loses in this environment?
Suppose that a security analyst uses the constant dividend growth model to determine the theoretical share price of a corporation. The annual dividend just paid was $3.00 per share. The analyst assumes a required rate of return of investors of 15%, a..
the book is financial management for public health and not-for-profit organization third edition by steven a.
Your firm is considering a project with a five-year life and an initial cost of $120,000. The discount rate for the project is 12%. The firm expects to sell 2,100 units a year. The cash flow per unit is $20. The firm will have the option to abandon t..
Decatur Arts Center writes 158 checks a day for an average amount of $211 each. These checks generally clear the bank 3.5 days after they are written. In addition, the firm generally receives an average of $50,000 a day in checks. The checks that are..
Marston Mfg recently declared a 4 for 1 split for its common shares. Before the split the firm's share price had risen to $600 per share and the firm's CFO felt that this high stock price inhibited trading in the firm's shares. What are the firms ear..
If you own 450 shares of Alaska Air at $62.08, 500 shares of Best Buy at $70.52, and 300 shares of Ford Motor at $9.31, what are the portfolio weights of each stock?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd