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What is the amount of expected dividend today

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Reference no: EM132853851

Question 1 - Petro-Max Corporation's stock is currently trading at P25 per share. The stock's dividend is projected to increase at a constant rate of 7 percent per year. The required rate of return on the stock is 10 percent.

1. What is the amount of expected dividend today?

A. 0.70

B. 0.75

C. 0.80

D. 1.75

2. What is the stock's expected dividend yield today?

A. 2.8%

B. 3.0%

C. 3.2%

D. 7.0%

3. What is the expected stock price the next year?

A. 26.75

B. 27.50

C. 28.63

D. 30.00

4. What is the expected stock price four years from today?

A. 28.14

B. 30.63

C.32.77

D.36.60

Question 2 - During the past few years, Metro De Oro (MDO) Bank has retained, on an average, 70% of its earnings in business. The future retention rate is expected to remain at 70% of earnings and the long-run growth rate is expected to be 10%. The risk-free rate is 8%, the market return is 12%, MDO's Beta is 2.0 and the most recent dividend, D0, was P1.50.

5. What is the market risk premium using CAPM?

A. 4%

B. 8%

C. 12%

D. 16%

6. What is the required rate of return using CAPM?

A.4%

B. 8%

C.12%

D.16%

7. What is the company's current market price?

A. 25

B. 27.5

C.30.25

D. 32

8. What is the expected dividend yield?

A. 4.50%

B. 4.95%

C.5.45%

D. 6.00%

9. What is the expected earnings per share (EPS)?

A. 5.0 : 1

B. 5.5: 1

C. 6.0 : 1

D. 6.5: 1

10. What is the expected price earnings ratio (PER)?

A. 5

B. 5.7

C.6

D. 6.5

Question 3 - GLOBAL Technology's stock is currently selling for P40 a share. The stock is expected to pay a P2.00 dividend at the end of the year. The stock's dividend is expected to grow at a constant rate of 7% per year forever. The risk-free rate is 6% and the market risk premium is also 6%.

11. What is the GLOBAL Technology's Beta?

A. 1.0

B. 1.06

C. 1.25

D. 2.0

12. What is the expected dividend yield?

A. 4.67%

B. 5%

C.5.35%

D. 7.0%

13. Determine the capital gains yield?

A. 6%

B. 6.65%

C. 7%

D. 7.33%

14. What is the expected stock price three years from today?

A. P42.8

B. P45.80

C. P 49

D. 52.43

Question 4 - UNION LAND Corporation's financial information stated the following:

Price-Earnings Ratio - 5:1

Expected common stock dividend per share - P4.00

Net Income - P500,000

Outstanding common stocks - 100,000 shares

Average equity - P2,000,000

15. What is the Earnings per share?

A. P1 per share

B. P 3 per share

C. P 4 per share

D. P 5 per share

16. What is the market price per share?

A. P5

B. P 15

C.P 20

D.P 25

17. What is the dividend yield?

A. 21%

B. 20%

C.16%

D. 10%

18. What is the Plow back Ratio or retention ratio?

A. 5%

B. 10%

C.15%

D. 20%

19. What is the expected growth rate?

A. 5%

B. 10%

C.15%

D.20%

20. What is the expected rate of return?

A. 21%

B. 20%

C.16%

D. 10%

Question 5 - Fil-Ham Life Asset Management Corp stock has a required return of 11%. Fil- Ham just paid dividend of P1.00 per share today. The dividend is expected to grow by 25% for two years, after which time it is expected to grow at a constant rate of 10% per year.

21. What is the terminal value?

A. P 156.25

B. P 171.875

C. P 173.43

D. P 214.84

22. What is the present value of the cash flows under the supernormal phase?

A. P 2.394

B. P 3.391

C.P 139.49

D. P 174.36

23. What is the present value of the cash flows under the constant phase?

A. P 2.394

B. P 3.394

C.P 139.49

D. P 174.36

24. What is the stock price of Fil-Ham life today?

A. P 141.88. B. P 142.88

C. P 175.88

D. P 176.88

25. What is the stock price of Fil-Ham life after one year?

A. 154.84

B. 156.25

C. 177.35

D. 178.60

26. What is the stock price of Fil-Ham life after two years?

A. 156.25

B. 157.81

C.171.88

D.173.44

27. What is the stock price of Fil-Ham life after three years?

A. 171.87

B. 189.07

C.190.78

D. 192.52

Reference no: EM132853851

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