Determine the value of company stock

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Question1) The Joe firm is experiencing financial problems. Its dividends and earnings are falling at a constant rate of 7 percent per year. It's stock just paid a yearly common stock dividend of $1.50 per share; the stock has a beta of o:45; three-month U.S Treasury Bill rate is 4.8%, and the market risk premium is 7%. Determine the value of the Joe Company's Stock.

Question2) A company's stock presently sells for $71 per share. The stock just paid a dividend of $2.12. The dividend is anticipated to increase at a constant rate of 5.5% a year. What stock price is anticipated one year from now?

Question3) A company has a target capital structure of 30% equity and 70% debt. The firm's tax rate is 35% and the yield to maturity on the firm's outstanding bonds is 8.2%. The firm's weighted average cost of capital is 8.76%. What's the firm's cost of equity capital?

Question4) A company has an equity multiplier of 3.71. The firm's assets are financed with some combination of common equity and long-term debt. What's the firm's debt ratio?

Question5) A firm's project has expected net cash inflows of $4,000 per year for seven years. The project has a cost of $12,200 and the cost of capital is 17% What's the project's modified internal rate of return?

Question6) A project has an upfront cost of $21,300,000. It's estimated that the project will produce the following net cash flows:
Year Project Net Cash Flows
1 $13,000,000
2 $3,000,000
3 $7,200,000

[A] Find the project's net present value when the cost of capital is 4 percent?
[B] Find the project's net present value when the cost of capital is 11 percent?

Reference no: EM1373468

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