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1 You are given the following information the "Gotta Have It Company" Dividend in the Current...
1) An analyst gathered the following financial information about a firm: Estimated (next year’s) EPS  
1) An analyst gathered the following financial information about a firm: Estimated (next year’s) EPS $10 per share Dividend payout ratio 40% Required rate of return 12% Expected long-term growth rate of dividends 5% What is the analysts’ estimate of intrinsic value? Show work. 2) An analyst has made the following estimates for a stock: dividends over the next year $.60 long-term growth rate 13% Intrinsic value $24 per share The current price of the shares is $22. Assuming the...
You forecast a company to have a ROE of 15%, a dividend payout ratio of 30%....
You forecast a company to have a ROE of 15%, a dividend payout ratio of 30%. The company has a beta of 1.2. The market risk premium is 8% and the risk free rate is 2%. What is company’s intrinsic forward PE ratio based on the formula? If you also know currently the company has a price of $30, and you forecast the company to have a $1 earnings per share. If firms with similar risks in the industry have...
6. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share...
6. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Procter and Gamble, assuming that dividends are held constant at $3.00, and you target a rate of return of 7.00% (1 point) 7. If the Risk Free Rate in Problem #6 is 2.50% and the Beta is 1.10 what is the Market Risk Premium? (1 point)
5. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share...
5. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Pepsi, assuming that dividends grow at a constant rate of 6.00%, next year's dividend will be $1.50, and you target a rate of return of 8.50% (1 point)
An investor gathers the following information about a company: 9. Current dividend share $3 per Historical...
An investor gathers the following information about a company: 9. Current dividend share $3 per Historical annual dividend growth rate 4% Expected annual dividend growth rate for the next three years 8% $33 Expected stock value per share at the end of Year 3 If the investor's required rate of return is 15%, the current estimate of the intrinsic value per share is: $
4. You manage a stock portfolio (made up of individual stocks) and you forecast the S&P...
4. You manage a stock portfolio (made up of individual stocks) and you forecast the S&P 500 Index to increase over the next year In regards to the Beta on your stock portfolio, would you (circle the best answer, 1 Point); a. No Change. b. Lower the Beta. c. Increase the Beta 5. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Pepsi. assuming that dividends grow at a constant rate of 6.00%, next...
Four years ago, Company A distributed a dividend to its shareholders of € 0.3858 per share....
Four years ago, Company A distributed a dividend to its shareholders of € 0.3858 per share. Today Company A paid a dividend of 0.80 € per share. In the past, the dividend policy of the company led to an increase in dividends each year at a steady rate. It is expected that the company will continue the same dividend policy for the next three years. Subsequently, the dividend growth rate will remain constant at 8% per annum for the foreseeable...
Valuation of Stock 1) P. Noel Company's common stock has just paid a $2.00 dividend. If...
Valuation of Stock 1) P. Noel Company's common stock has just paid a $2.00 dividend. If investors believe that the expected rate of return on P. Noel is 14% and that dividends will grow at the rate of 5% per year for the foreseeable future, what is the value of a share of P. Noel stock? A) $15.00 B) $22.22 C) $23.33 D) $40.00 2) Green Company's common stock is currently selling at $24.00 per share. The company recently paid...
3) IBM's stock is currently trading at $133 per share. The EPS for 2018 was $15.00 and the dividend was $5.00 The b...
3) IBM's stock is currently trading at $133 per share. The EPS for 2018 was $15.00 and the dividend was $5.00 The beta of IBM is 1.2 The risk-free rate is 2% and the market risk premium is 7% 1) What is the intrinsic value of the stock if you forecast the company to grow at 20% for the next 2 years, then 5% thereafter, assuming that the payout ratio remains constant at current levels? 2) What is the intrinsic...
You have been appointed as a financial consultant cost of capital of the company, (25 Marks)...
You have been appointed as a financial consultant cost of capital of the company, (25 Marks) the directors of ABC Limited. They require you to calculate the The following information is available available on the capital structure of the company 1 500 000 Ordinary shares, with a market price and the return on the market is 15%. price of R3 per share. The beta of the company is 1.8, a risk-free rate of 1 000 000 12%, R1 Preference share...
6. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Procter and Gamble, assuming that dividends are held constant at $3.00, and you target a rate of return of 7.00% (1 point) 7. If the Risk Free Rate in Problem #6 is 2.50% and the Beta is 1.10 what is the Market Risk Premium? (1 point)
5. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Pepsi, assuming that dividends grow at a constant rate of 6.00%, next year's dividend will be $1.50, and you target a rate of return of 8.50% (1 point)
An investor gathers the following information about a company: 9. Current dividend share $3 per Historical annual dividend growth rate 4% Expected annual dividend growth rate for the next three years 8% $33 Expected stock value per share at the end of Year 3 If the investor's required rate of return is 15%, the current estimate of the intrinsic value per share is: $
4. You manage a stock portfolio (made up of individual stocks) and you forecast the S&P 500 Index to increase over the next year In regards to the Beta on your stock portfolio, would you (circle the best answer, 1 Point); a. No Change. b. Lower the Beta. c. Increase the Beta 5. A Use the Dividend Growth Valuation Model to calculate the Inherent value of one share Pepsi. assuming that dividends grow at a constant rate of 6.00%, next...
3) IBM's stock is currently trading at $133 per share. The EPS for 2018 was $15.00 and the dividend was $5.00 The beta of IBM is 1.2 The risk-free rate is 2% and the market risk premium is 7% 1) What is the intrinsic value of the stock if you forecast the company to grow at 20% for the next 2 years, then 5% thereafter, assuming that the payout ratio remains constant at current levels? 2) What is the intrinsic...
You have been appointed as a financial consultant cost of capital of the company, (25 Marks) the directors of ABC Limited. They require you to calculate the The following information is available available on the capital structure of the company 1 500 000 Ordinary shares, with a market price and the return on the market is 15%. price of R3 per share. The beta of the company is 1.8, a risk-free rate of 1 000 000 12%, R1 Preference share...
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