User Account

All Pages

What is Q stock worth per share

Assignment Help Accounting Basics
Reference no: EM133050780

Question - Company Q's current return on equity (ROE) is 13%. It pays out 45 percent of earnings as cash dividends (payout ratio = 0.45). Current book value per share is $68. Book value per share will grow as Q reinvests earnings.

Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 11.0% and the payout ratio increases to 0.90. The cost of capital is 11.0%.

a. What are Q's EPS and dividends in years 1, 2, 3, 4, and 5?

b. What is Q's stock worth per share?

Reference no: EM133050780

Questions Cloud

What should today price be for each stock : The standard deviation of the market returns is 18%. Assume that the next dividend will be paid after one year, at t= 11. What should today price be each stock
What Beasley record as total assets acquired in merger : Donovan owns a building with a fair value $30,000 higher than its book value. What Beasley record as total assets acquired in merger
Explain job order costing and process costing : Explain job order costing and process costing. What types of businesses use job order costing? What types of businesses use process costing
Concept of the life cycle to organization : Apply the concept of the life cycle to an organization you are familiar with, such as your current employer, a local business, or a popular company.
What is Q stock worth per share : After that, competition forces ROE down to 11.0% and the payout ratio increases to 0.90. The cost of capital is 11.0%. What is Q stock worth per share
Compare and contrast the arguments of condon and hynek : Compare and contrast the arguments of Condon and Hynek, regarding the existence of UFOs. Evaluate the conclusion that each person draws and the evidence that ea
Build financial projections for your business idea : Explain your revenue estimates, variable costs, fixed costs, margin, and how your arrived at your figures - build and defend financial projections
Impacting on the challenges brought by covid19 pandemic : Research and summarize one international company of choice that has done well "by doing good" in terms of impacting on the challenges brought by Covid19 pandemi
What would be an approximate market price per share : If the common stock had a market price of $96 per share before the stock split, what would be an approximate market price per share after the split

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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