What is present value of growth opportunities

Assignment Help Financial Management
Reference no: EM131890642

1. Next year's earnings are estimated to be $5. The company plans to reinvest 25% of its earnings at 20%. If the cost of equity is 11%, what is the present value of growth opportunities?

2. The market capitalization rate on the stock of Aberdeen Wholesale Company is 9%. Its expected ROE is 11%, and its expected EPS is $3. If the firm's plowback ratio is 60%, its P/E ratio will be _________.

Reference no: EM131890642

Questions Cloud

What is the company expected growth rate : Kahn Inc. has a target capital structure of 60% common equity and 40%. What is the company's expected growth rate?
What would be the future value of deposits : What would be the future value of his deposits at the end of the 7 year?
Identify two ways in which the interview went well : Identify two ways in which the interview did not go well. Explain what steps the investigator might have taken to better prepare for the interview.
Realized rate of return from investment : If you sell the bond at the current price of 1,051, what is your realized rate of return from this investment?
What is present value of growth opportunities : The company plans to reinvest 25% of its earnings at 20%. If the cost of equity is 11%, what is the present value of growth opportunities?
What is the current price of the bond : The current interest rate on this type of bond is 13.39 percent, compounded annually. What is the current price of the bond?
What issues arise based upon the districts demographics : Given your results, and your previous district analysis research, what's your platform? Choose at least three issue stands to develop.
What is the expected return on portfolio : You place 30% of your money in A and 70% in B. What is the expected return on your portfolio? Justify your answer
Percentage of company capital structure consists of debt : Hook Industries's capital structure consists solely of debt and common equity. What percentage of the company's capital structure consists of debt?

Reviews

Write a Review

Financial Management Questions & Answers

  What is your estimate of the firm enterprise value

If the appropriate discount rate for valuing the winery is 15%, what is your estimate of the firm’s enterprise value?

  What was your total real rate of return on investment

Suppose you bought a 14 percent coupon bond one year ago for $1,090. The bond sells for $1,150 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate of return on..

  Creating budget for recently awarded ten-year research grant

Professor Xavier is creating a budget for his recently awarded 10-year research grant. How much should he put in the budget today for maintenance costs?

  Empirical evidence shows-financial market price movements

Empirical evidence shows that financial market price movements are essentially random. Financial markets are reasonable efficient markets. Financial markets are NOT efficient markets.

  Used as the initial cash flow for this building project

What amount should be used as the initial cash flow for this building project?

  What is the annual worth of each option

Parker County Community College (PCCC) is trying to determine whether to use no insulation. What is the annual worth of each option?

  Analyze the uncovered interest arbitrage

analyze the uncovered interest arbitrage

  Value of savings account

At the end of 2011, the value of my savings account was $20,000. Over the next three years, the rates of return on the account were as shown below. How much was in the account at the end of the third year, 2014?

  What is your dollar return for the past year

One year ago you bought Excellent stock for $81.00 per share. You received four quarterly dividends over the past year of $1.21 each. Now the stock is selling for $73.00 per share. What is your dollar return for the past year? What is the dividend yi..

  Identify two theories from the financial planning

Identify two (2) theories from the financial planning or financial analysis areas (based upon your concentration).

  Which of the cash flows are incremental cash flows

Which of the following cash flows are incremental cash flows that need to be considered when evaluating a capital project?

  What will be the balance on the account after eight deposits

You deposit today $600 dollars in an account that pays 1.4 percent per year. For the next few years you will keep making deposits 5.1 percent larger than the previous one. What will be the balance on the account after 8 deposits?

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd