What is the share price if the plowback ratio

Assignment Help Finance Basics
Reference no: EM13303282

You are the CEO of company F. The current earnings per share is $10 and the return on equity is 25%. You will resign after next year's dividend due to change of management and the share price after your resignation is expected to be earnings per share at that time multiplied by the current P/E ratio of 9.

What is share price if the plowback ratio is 0.5? What is the share price if the plowback ratio is 0? Explain the reasons for the difference in your two answers.

 

Reference no: EM13303282

Questions Cloud

Determine the elongation of the plate under a tensile load : a flat steel plate of 10mm thickness varies in width from 150mm to 300mm over a length of 1.5m. Determine the elongation of the plate under a tensile load of 250KN
Calculate the density it will have in any ideal gas state : List the densities in solid, liquid and gaseous state. Also compare the densities for each of them and calculate the density it will have in any ideal gas state.
Determine the force and the distance : A 2.6-kg sphere of radius 35 cm is initially rolling on a flat surface with a speed of v = 0.40 m/s. Determine the force F and the distance l
Determine the allowable value of the tensile load p : A steel bar serving as a vertical hanger to support heavy machinery in a factory is attached to a support by the bolted connection. The main part of the hanger has a rectangular cross section with width b1 = 1.5 in. and thickness t = 0.5 in.
What is the share price if the plowback ratio : What is share price if the plowback ratio is 0.5? What is the share price if the plowback ratio is 0? Explain the reasons for the difference in your two answers.
Determine the force that the hinge puts on the gate : A rectangular gate 6 ft tall and 5 ft wide in the side of an open tank is held in place by the force F as indicated in the figure. The weight of the gate is negligible, and the hinge at O is frictionless.
What is the maximum speed attained by the person : A person bounces up and down on a trampoline, while always staying in contact with it. What is the maximum speed attained by the person
Find the optimal solution by using the graphical solution : Find the optimal solution by using the graphical solution technique and what is the value of the objective function? What are the values of all variables?
What are the main differences between equity and bond : How do you justify the fact that share value is determined by PV of all future dividends but most investors don't need to hold the share forever to profit from such investment?

Reviews

Write a Review

Finance Basics Questions & Answers

  Debt and equity are considered entities

Suppose the given statement by a financial manager: "Since we are financing our new manufacturing facility 100 percent with equity, we must estimate it using a higher rate of return than we would if we financed a portion of the facility with debt."

  Star wall street trader is negotiating his 1st contract

A star Wall Street trader is negotiating his 1st contract. His opportunity cost is= 10%. He has been presented the 3 year contracts which are given below.

  Draw and submit a time line

Draw and submit a time line, including EBIT, taxes, depreciation, operating cash flow, tvm factors, and discounted cash flow.

  How big will the balloon payment be

However, the loan has an eight-year balloon payment, meaning that the loan must be paid off then.

  What is the net present value of this project

What is the net present value of this project?

  What is the average amount of receivables

The bad debts percentage is estimated to be 5%. Use a 365 day year. Calculate both the APR and EAR of d and e.

  What was the cash flow from operating activities

what was the cash flow from operating activities?

  S net value if the portfolio is hedged with the index.

Show the effect on the portfolio in terms of its net value if the portfolio is hedged with the index.

  Computing the average return for treasury bills

Computing the average return for treasury bills and calculate the average return for Treasury bills and the average annual inflation rate

  Decision making models and preferred stock

Given two projects, what are the decision models that you can use to make a decision as to which project you should accept? Which is the better?

  Find the change in operating cashflow

The upgrade will cost the firm a combined total of $23,000,000 up front, but will lower operating expenses by 4,400,000 per year forever. The company is facing a 38 percent tax rate.

  Determine at least one primary and one secondary method

There are a number if large projects to evaluate. What criteria are you most likely to use to evaluate these projects and why? What would each criterion tell you? Determine at least one primary and one secondary method.

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!

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