please solve the highlighted areas
Homework Answers
ROE = Net Income / Shareholder equity = 4.8 / 24 = 20%
Growth rate, g = ROE x plowback ratio = 20% x 55% = 11%
Value of firm = Dividends / (r - g) = 4.8m x (1 - 55%) / (15.70% - 11%) = $45,957,447
Add Answer to:
please solve the highlighted areas
* Based on the constant growth model, compute the values discussed...
No 1. CiMob LLC is currently growing rapidly and increasing its share on the market. So,...
No 1. CiMob LLC is currently growing rapidly and increasing its share on the market. So, it is expected to have 4 years more of above industry growth. The growth rate during 4 years will be such that return on equity this period will be 12%. After this period of extra growth, the competition on the market from main competitors (YX LLC and Ur LLC) increases and the possibilities to increase market share will exhaust. So, the desire to continue...
Questions 1-3 Create an excel file and solve the following problems. 1. Firm ABC has a...
Questions 1-3
Create an excel file and solve the following problems. 1. Firm ABC has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth opportunities if the required return is 992 Use excel spinners to change required return to 8%, 10%, 11%, and 12%. Record and report present values for each. 2. Firm X pays a current (annual) dividend of $1 and is expected to grow at 20% for...
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined...
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined from the method we presented in the textbook. Many analysts will estimate the dividend for the next 5 years and then estimate a perpetual growth rate at some point in the future, typically 10 years. Rather than have the dividend growth fall dramatically from the fast growth period to the perpetual growth period, linear interpolation is applied. That is, the dividend growth is projected...
can you help me solve the highlighted areas with excel formulas Module 5 Student Version 4/4/96...
can you help me solve the highlighted areas
with excel formulas
Module 5 Student Version 4/4/96 Financial Statements for the Year Ended December 31, 1995 (Millions) ACE REPAIR, INC. Cost of Capital (Easy ERSION Cash & Sec. A/R Inventory $5.0 46.3 74.1 A/P Accruals N/P $39.0 14.7 35.5 This case illustrates the cost of capital estimation process. It demonstrates (1) the mechanics of determining the component costs of capital--specifically debt, preferred stock and common equity, (2) the effects of changes...
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1....
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
How would calculate these questions? With it being on a word document not on excel. w...
How would calculate these questions? With it being on a word
document not on excel.
w 5 year di struct a table We stock price at Y in the perpetual growth a rale nel Grup to find out she cock price in ith price ralio vale divided by the tan stock price. Suppo to . Assume that a perpetual growth rate of 5 percent begins 11 years interpolate herween the high growth rate and perpetual growth rate shows the dividend...
Electronic Timing Inc (ETI) is a small company founded 15 years ago by electronic engineers Tom Miller and Jessica Kerr
Electronic Timing Inc (ETI) is a small company founded 15 years ago by electronic engineers Tom Miller and Jessica Kerr. EIT manufactures integrated circuits to capitalize on the complex nixed-signal design technology and has recently entered the market for frequency timing generators, or silicon timing devices, which provide the timing signals or “clocks” necessary to synchronize electronic systems. Its clock products originally were used in PC video graphics applications, but the market subsequently expanded to include motherboards, PC peripheral devices,...
ELECTRONIC TIMING, INC. Electronic Timing, Inc. (ETI), is a small company founded 15 years ago by...
ELECTRONIC TIMING, INC. Electronic Timing, Inc. (ETI), is a small company founded 15 years ago by electronics engineers Tom Miller and Jessica Kerr. ETI manufactures integrated circuits to capitalize on the complex mixed-signal design technology and has recently entered the market for frequency timing generators, or silicon timing devices, which provide the timing signals or "clocks” necessary to synchronize electronic systems. Its clock products originally were used in PC video graphics applications, but the market has subsequently expanded to include...
To fill out the first table, you will need to select 3 bonds with maturities between...
To fill out the first table, you will need to select 3 bonds with maturities between 10 and 20 years with bond ratings of "A to AAA," "B to BBB" and "C to CC" (you may want to use bond screener at the Web site linked above). All of these bonds will have these values (future values) of $1,000. You will need to use a coupon rate of the bond times the face value to calculate the annual coupon payment....
Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year...
Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31, 20X4. In planning the audit, Marilyn is attempting to develop expectations for planning analytical procedures based on the financial information for prior years and her knowledge of the business and the industry, including these: 1. Based on economic conditions, she believes that the increase in sales for the current year should approximate the historical trend. 2. Based on her knowledge of...
No 1. CiMob LLC is currently growing rapidly and increasing its share on the market. So, it is expected to have 4 years more of above industry growth. The growth rate during 4 years will be such that return on equity this period will be 12%. After this period of extra growth, the competition on the market from main competitors (YX LLC and Ur LLC) increases and the possibilities to increase market share will exhaust. So, the desire to continue...
Questions 1-3
Create an excel file and solve the following problems. 1. Firm ABC has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth opportunities if the required return is 992 Use excel spinners to change required return to 8%, 10%, 11%, and 12%. Record and report present values for each. 2. Firm X pays a current (annual) dividend of $1 and is expected to grow at 20% for...
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined from the method we presented in the textbook. Many analysts will estimate the dividend for the next 5 years and then estimate a perpetual growth rate at some point in the future, typically 10 years. Rather than have the dividend growth fall dramatically from the fast growth period to the perpetual growth period, linear interpolation is applied. That is, the dividend growth is projected...
can you help me solve the highlighted areas
with excel formulas
Module 5 Student Version 4/4/96 Financial Statements for the Year Ended December 31, 1995 (Millions) ACE REPAIR, INC. Cost of Capital (Easy ERSION Cash & Sec. A/R Inventory $5.0 46.3 74.1 A/P Accruals N/P $39.0 14.7 35.5 This case illustrates the cost of capital estimation process. It demonstrates (1) the mechanics of determining the component costs of capital--specifically debt, preferred stock and common equity, (2) the effects of changes...
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
How would calculate these questions? With it being on a word
document not on excel.
w 5 year di struct a table We stock price at Y in the perpetual growth a rale nel Grup to find out she cock price in ith price ralio vale divided by the tan stock price. Suppo to . Assume that a perpetual growth rate of 5 percent begins 11 years interpolate herween the high growth rate and perpetual growth rate shows the dividend...
ELECTRONIC TIMING, INC. Electronic Timing, Inc. (ETI), is a small company founded 15 years ago by electronics engineers Tom Miller and Jessica Kerr. ETI manufactures integrated circuits to capitalize on the complex mixed-signal design technology and has recently entered the market for frequency timing generators, or silicon timing devices, which provide the timing signals or "clocks” necessary to synchronize electronic systems. Its clock products originally were used in PC video graphics applications, but the market has subsequently expanded to include...
Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31, 20X4. In planning the audit, Marilyn is attempting to develop expectations for planning analytical procedures based on the financial information for prior years and her knowledge of the business and the industry, including these: 1. Based on economic conditions, she believes that the increase in sales for the current year should approximate the historical trend. 2. Based on her knowledge of...
Most questions answered within 3 hours.
-
Adams Camps, Inc. leases the land on which it builds camp sites.
Adams is considering opening...
asked 33 seconds from now -
An Olympic archer misses the bull's-eye 11% of the time.
Assume each shot is independent of...
asked 6 minutes ago -
a gas cylinder in the lab contains 12.0 ft3 of some gas at 70ºF
and 100psia....
asked 6 minutes ago -
Consider the data in the following table regarding the age of a
particular model of car...
asked 10 minutes ago -
She estimates the following model as Rent = β0 + β1 Bedroom + β2
Bath +...
asked 31 minutes ago -
Prove that the following is a valid cumulative distribution
function
F(x) = x/(1+x) for a>=0
0...
asked 1 hour ago -
Sal's satellite company broadcasts TV to subscribers in Los
Angeles and New York. The demand functions...
asked 23 minutes ago -
1. Sketch the expected Mass Spectrum of Pentane (C5H12)
2. Draw the most stable Newman projection...
asked 59 minutes ago -
Russel Wisselink “Have a plan ready for me by 9:00 a.m. tomorrow
morning” was the instruction...
asked 26 minutes ago -
Write the balanced chemical equation for the reaction between
iodate and bisulfite. Does the order with...
asked 49 minutes ago -
how can you efficiently determine the number of atoms
in a sample of an element?
asked 34 minutes ago -
Calcium dihydrogen phosphate, Ca(H2PO4)2, and sodium hydrogen
carbonate, NaHCO3, are ingredients of baking powder that react...
asked 39 minutes ago