What is the firms retention ratio

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1) PT Boats plans to pay a $2.25 a share dividend at the end of each of the next 2 years. At the end of year 3, it will pay a final liquidating dividend of $15 a share. After that, the company plans to close its doors permanently. What is the current value of this stock at a discount rate of 15 percent?

2) You are considering buying shares of stock in the Steel Mill. The forecast for the firm is steady growth over the next decade. The firm just paid its annual dividend of $1.42 per share and has plans to increase that amount by 4 percent annually indefinitely. You require a 12.5 percent return on this type of security. What is your estimate of the value of this stock ten years from now? (2 points)

3) Home Interiors has net income of $248,000. The firm has decided to pay $160,000 of that income out to the shareholders. What is the firm's retention ratio?

4) Art Supplies has a net income of $138,600. The firm has $1.25 million in assets and $500,000 in liabilities. What is the return on equity?

5) Wilderness Adventures has earnings per share of $2.45 and dividends per share of $1.05. The total equity of the firm is $850,000. There are 40,000 shares of stock outstanding. What is the sustainable rate of growth?

Reference no: EM13798317

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