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4. You have been watching XYZ Corp. as a possible investment. You are convinced that XYZ's long run target payout is approximately 60% of its long run earnings. You also noticed that the firm tends to follow Lintner's "partial adjustment dividend model", and that the partial adjustment coefficient tends to be about 30%. Last year it paid out $0.60on earnings of $1.20. The firm announces that it will pay $0.60 on earnings of $1.25 for the current year. (a) What is your guess regarding management's perception of the firm's long-run earnings (rounded to the nearest cent)? (b) What do you think would happen to the stock price if the firm, instead of paying the dividend per share of $0.60, the firm announced a repurchase of shares through open market purchases of approximately the same aggregate amount? (c) The following year, the firm announces an annual dividend of $.61 on earnings of $1.10. What is your revised estimate of long run earnings?
what is the default risk premium on the corporate bonds? Round your answer to two decimal places.
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Compute the return on the investment and What is the rate of return that Pedro is being promised
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a united states company x has contracted to provide a service to a european company z european company uses the euro
From a diversity standpoint, what do you need to know about your targeted learners and the training requirements needed prior to taking an assignment in a foreign country.
If the required rate of return on the stock is 15 percent, what is its expected price four years from today?
A retiree believes that investing in a non-dividend paying growth firm that requires the periodic sale of stock for income, will eventually lead to a loss of all shares. Explain the flaw in this logic.
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The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Calculate the NPV of the investment.
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