User Account

All Pages

What is the dividend yield of a stock

Assignment Help Accounting Basics
Reference no: EM132266720

Question 1: When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at the required rate of return of the stock.

True

False

Question 2: Heinlein group's stock has a required rate of return that exceeds its expected return. Which of the following might be good investment strategies? More than one answer may be correct.

Purchase the stock

Short sell the stock

Sell the stock

Buy call options on the stock

There is not enough information to solve this problem.

Question 3: Vinge Inc's stock is in equilibrium and the company's dividends are expected to grow at a constant rate of 7% each year. Which of the following statements are correct? More than one answer is possible.

The company's dividend yield is 7%.

Vinge's stock price is expected to increase by 7% each year.

The expected rate of return on Vinge's stock is 7%.

The capital gains yield of Vinge's stock is 7%.

Vinge's stock price should drop next year

Question 4: What is the dividend yield of a stock which just paid a dividend of $4, has an expected growth rate of 0.05 and a current price of $39?

Question 5: What is the capital gains yield of a constant growth stock with an expected growth rate of 0.13. The stock just paid a dividend of $8.83 and according to the Capital Asset Pricing Model the stock should return 0.16?

Question 6: Based on the constant growth stock model, what is the value of a security with an expected growth rate of 0.05, if the stock just paid a dividend of $3.4 and according to the Capital Asset Pricing Model the stock should return 0.09?

Question 7: You are considering selling your family's auto parts company. If the average P/E ratio of a company in the auto-parts industry is 11 and last year your company had earnings of $17m, what is an estimate for the value of your company?

Question 8: MacLeod Inc.'s stock has a beta of 1.2 and a required rate of return of 0.13. If the expected rate of return of the U.S. government T-bill is 0.06, what is the expected rate of return of the market index according to the Capital Asset Pricing Model?

Question 9: Koman company's stock just paid a dividend of $5. The company's dividend is expected to grow at a rate of 0.28 this year, 0.15, next year, 0.07 for every year after that. If Koman has a required rate of return of 0.11, what is terminal value of the stock or what is the value of the stock when it first becomes a constant growth stock?

Question 10: Walton Inc.'s stock just paid a dividend of $1. The company's dividend is expected to grow at a rate of 0.21 this year, 0.15, next year, and 0.08 for every year after that. If Walton has a required rate of return of 0.11, what is the value of Walton's the stock?

Reference no: EM132266720

Questions Cloud

Why was the constitution a controversial document : Why was the Constitution a controversial document even as it was being written? 3-5 paragraphs
Develop a fraud prevention and detection policy for amazon : Develop a fraud prevention and detection policy for Amazon. Your fraud prevention and detection policy should cover the following issues.
What measures could have been taken to prevent the fraud : How did the fraud operate? What measures could have been taken to prevent and detect the fraud? An accounting information system would have safeguards in place.
Role of the colonies in the british mercantilist system : What was the role of the colonies in the British mercantilist system? 3-5 paragraphs
What is the dividend yield of a stock : What is the dividend yield of a stock which just paid a dividend of $4, has an expected growth rate of 0.05 and a current price of $39?
Explain the value to the patient of incorporating cultural : Describe the cultural beliefs and values presented in the videos - Explain the value to the patient of incorporating cultural awareness in the education
Particular issue in critical thinking : Discuss how more recent thinkers have further unfolded the initial idea - Perhaps there are criticisms of the initial idea. What are they
Clinical reflection on the patient and dying process : Group Clinical Supervision Reflection Assignment - The assignment is to reflect on the patient and the dying process
Write a one to two-page summary of the article : Demonstrate your ability to summarize, paraphrase, and appropriately quote the work of others using technical writing standards and correct citation format

Reviews

Write a Review

Accounting Basics Questions & Answers

  What do you predict will be the total cost of factory rent

Listed here are the total costs associated with the 2011 production of 10,000 Blu-ray Discs (BDs) manufactured by Hip-Hop. The BDs sell for $15 each.

  Compute the price quimby paid on the bond investment

Using the PV function in Excel, compute the price Quimby paid (the present value) on the bond investment

  Compute the annual lessee payment

Wayne Enterprises' incremental borrowing rate is determined to be 7%. Compute the annual lessee payment Wayne Enterprises will make to the Stark Industries

  Compute the cost of the ending inventory

Jones Company had 100 units in beginning inventory at a total cost of $10,000. Compute the cost of the ending inventory and the cost of goods sold

  Calculate amount of net income under cash-basis accounting

Calculate the amount of net income that Lauhl should recognize in April under cash-basis accounting. Calculate the amount of net income that Lauhl should.

  Complete the following schedule as of december

Complete the following schedule as of December 31, 2014, to analyze the differences among the three cases

  Organisation stressing some objectives

What advantages and disadvantages result from the organisation stressing some objectives over others? Harvard referencing style, at least 4 references and no plagiarism

  Prepare the entry to record the issuance of the bonds

Assume the same facts as part (a), except that the warrants had a fair value of $20. Prepare the entry to record the issuance of the bonds and warrants.

  Define and summarize the c form of a corporation

Define and summarize the C form of a corporation - include a link to the IRS page where the reader can review this specific information.

  Determine lisa recognized gain or loss

Determine Lisa's recognized gain or loss, Lisa's basis in distributed property, and Lisa's ending basis in her partnership interest

  Discuss what is the net present value of the machine

The projected annual after-tax net income from the equipment, Daniels requires a return on its investments

  Part of cost of goods

The inventory cost flow assumption in which the oldest costs incurred become part of cost of goods sold when units are sold is

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