What is the growth rate of the book value of equity

Assignment Help Macroeconomics

Reference no: EM13184907

The stock of Company B has a beta of 1.25. The consensus estimate of next year's equity market return is 10% and the risk-free rate is 2%. The company had earnings of $5 per share last year and the company pays out 40% of earnings as dividends. The company's business typically generate a return on equity of 15%.

(a) What is the expected return on the equity?

(b) What is the capitalization rate?

(d) What will be the dividend next year?

(e) What is the growth rate of dividends?

(f) What is the growth rate of earnings?

(g) What is the growth rate of the book value of equity?

(h) What is the earnings per share for next year?

(i) What is the intrinsic value of the stock?

(j) If the stock is currently trading at $30, is the stock overpriced or underpriced?

(k) Would you buy or sell the stock?

(l) What is the no growth value of the stock?

(m) What is the present value of growth opportunities? or P/E ratios the price is at a point in time while the earnings occur over a period of time. It is, therefore, necessary to specify whether the earnings are for the trailing twelve month period (TTM) or for the next twelve month period (NTM). The P/E based on NTM earnings is called a forward P/E. (Note: there can be other variations if you are not at the end of a fiscal or calendar year).

(n) What is the forward P/E ratio (based on NTM earnings)?

(o) What is the P/E ratio based on TTM earnings?

Reference no: EM13184907

Questions Cloud

Compute the annual growth rate of dividends : Compute the growth rate of the dividend, g. (You can either compute the ROE*plowback ratio or compute the annual growth rate of dividends) e) Based on this information, what should the price of the stock be today using the constant-growth dividend ..

State the meteorite dissociates and the resulting oxygen : how thick of a veneer is required if some of the water from the meteorite dissociates and the resulting oxygen is used to oxidize one third of Fe+2 in the outer 800 km of the 6000 km proto earth to Fe3+?

State what are the expected impurities in acetophenetidin : what are the expected impurities in acetophenetidin synthesis?

What is the growth rate of the book value of equity : What is the present value of growth opportunities? or P/E ratios the price is at a point in time while the earnings occur over a period of time. It is, therefore, necessary to specify whether the earnings are for the trailing twelve month period (..

What is the expected return on the equity : Company A just paid a $3.00 dividend per share. The dividend is expected to grow at a 4% rate indefinitely. The beta of the stock of Company A is 1.5. The market risk premium is 8% and the risk-free rate is 3%. (a) What is the expected return on t..

Compute the calorimeter constant : Calculate the calorimeter constant. The enthalpy of combustion of antracene is -7061 kJ/mol.

Explain economic stimulus package-expansionary fiscal policy : By early 2008, most economists believed we were heading towards recession. Congress and the President passed an Economic Stimulus Package (Expansionary Fiscal Policy) and the Federal Reserve cut interest rates (Expansionary Monetary Policy). Expla..

State how many molecules of nh are produced : How many molecules (not moles) of NH3 are produced from 1.52×10?4g of H2?

User Account

All Pages