Dividend per share of adelaide mining company

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1) ABC Ltd, with 80 outstanding shares, has $100 in earnings after taxes. The firm is considering an on-market buy back for 20% of the shares at the market price of $15 per share. The management has decided to use the excess cash reserves which currently earns 7.5% interest after-tax, to finance this buy-back. What is the expected EPS if this buy-back goes ahead:

2) Adelaide Mining Company has EPS of $10 at the end of the first year, a dividend-payout ratio of 40 percent, a discount rate of 16 percent, and a growth rate in dividends of 12 percent.

What is the dividend per share of Adelaide Mining Company?

What is the value of a share of Adelaide Mining Company?

3) A financial analyst evaluating a company's common stock has gathered the following data. Current dividend per share is $5. Dividend growth rate expected during the first 2 years is 20%. The dividend growth rate expected from Year 3 onward is 4%. The required rate of return on equity is 15%. The intrinsic value per share of this common stock is:

Reference no: EM132623653

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