Homework Answers
1. FORWARD PRICE TO BOOK MULTIPLE IS NOT FORECAST BY ANALYSTS:
Most of the time price to book ratio is favoured by most of the good investors and market analylsts with the specified formulas however future predictions are not done by P/B ratio.
2.THE TRAILING P/B MULTIPLE IS NOT FORECAST BY ANALYSTS:
Most of the time trailing P/E multiple is calculated by analysts. it is calculated by current stock price by trailing earnings per share(EPS)
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Assignment Keep the Highest: 12 empts: 2. Problem 8-12 eBook Problem 8-12 Assume that a company...
5. Problem 8-11 eBook Problem 8-11 Assume a company has a payout ratio of 41 percent,...
5. Problem 8-11 eBook Problem 8-11 Assume a company has a payout ratio of 41 percent, a profit margin of 6 percent, a cost of equity of 10 percent and a growth rate of 2.5 percent. Do not round Intermediate calculations. Round your answers to three decimal places. a. What is the forward price-sales multiple? b. What is the trailing price-sales multiple?
Problem 8-11 Assume a company has a payout ratio of 43 percent, a profit margin of...
Problem 8-11 Assume a company has a payout ratio of 43 percent, a profit margin of 7 percent, a cost of equity of 14 percent and a growth rate of 3.0 percent. Do not round intermediate calculations. Round your answers to three decimal places. a. What is the forward price-sales multiple? b. What is the trailing price-sales multiple?
Attempts: 0 Keep the Highest: 0/3 1. Problem 8-02 eBook Problem 8-02 The Clipper Sailboat Company...
Attempts: 0 Keep the Highest: 0/3 1. Problem 8-02 eBook Problem 8-02 The Clipper Sailboat Company is expected to earn $3 per share next year. The company will have a return on equity of 18 percent and the company will grow 4 percent in the future. The company has a cost of equity of 16 percent. Given that information, answer the following questions. a. What is the value of the company's stock? Do not round intermediate calculations. Round your answer...
empts: Keep the Highest: /7 Problem 8.06 (Expected Returns) eBook 1 Problem Walk-Through cocks A and...
empts: Keep the Highest: /7 Problem 8.06 (Expected Returns) eBook 1 Problem Walk-Through cocks A and B have the following probability distributions of expected future returns: Probability (14%) (30%) 0.1 a. Calculate the expected rate of return, , for Stock B (A - 13.50%.) Do not round intermediate calculations. Round your answer to two decimal places. b. Calculate the standard deviation of expected returns, oa for Stock AO - 18.66%.) Do not round intermediate calculations. Round your answer to two...
Keep the Highest: 0/1 0 Attempts: 3. Problem 8-05 (Nonconstant Growth Valuation) eBook Nonconstant Growth Valuation...
Keep the Highest: 0/1 0 Attempts: 3. Problem 8-05 (Nonconstant Growth Valuation) eBook Nonconstant Growth Valuation A company currently pays a dividend of $2 per share (Do= $2) . It is estimated that the company's dividend will grow at a rate of 16 % per year for the next 2 years, and then at a constant rate of 5 % thereafter. The company's stock has a beta of 1.7, the risk-free rate is 9.5 % , and the market risk...
04 End-of-Chapter Problems - Analysis of Financial Statements Back to Assignment Attempts: Keep the Highest: /1...
04 End-of-Chapter Problems - Analysis of Financial Statements Back to Assignment Attempts: Keep the Highest: /1 5. Problem 4.05 Click here to read the eBook: Market Value Ratios PRICE/EARNINGS RATIO A company has an EPS of $2.40, a book value per share of $25.68, and a market/book ratio of 1.5x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places. Grade It Now Save Continue Continue without saving...
Attempts: 2. Problem 7.02 Keep the Highest: V2 Click here to read the eBook: Bond Yields...
Attempts: 2. Problem 7.02 Keep the Highest: V2 Click here to read the eBook: Bond Yields Problem Walk-Through YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 20 years to maturity, and a 8% annual coupon and sells for $1,110. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years...
k to Assignment Attempts: 0 Keep the Highest: 0/2 7. Problem 4.07 Click here to read...
k to Assignment Attempts: 0 Keep the Highest: 0/2 7. Problem 4.07 Click here to read the eBook: Potential Misuses of Roe ROE AND ROIC Baker Industries' net income is $26,000, its interest expense is $6,000, and its tax rate is 35 %. Its notes payable equals $23,000, long-term debt equals $75,000, and common equity equals $255,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROJC? Round...
eBook Problem 8-02 The Clipper Sailboat Company is expected to earn $4 per share next year....
eBook Problem 8-02 The Clipper Sailboat Company is expected to earn $4 per share next year. The company will have a return on equity of 15 percent and the company will grow 5 percent in the future. The company has a cost of equity of 12 percent. Given that information, answer the following questions a. What is the value of the company's stock? Do not round intermediate calculations. Round your answer to the nearest cent. b. What is the present...
< Back to Assignment Attempts: 0 Keep the Highest: 0/12 8. Problem 12.08 (New Project Analysis)...
< Back to Assignment Attempts: 0 Keep the Highest: 0/12 8. Problem 12.08 (New Project Analysis) eBook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $180,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $85,000. The equipment would require a $12,000 increase in net operating working capital (spare parts inventory). The project would...
5. Problem 8-11 eBook Problem 8-11 Assume a company has a payout ratio of 41 percent, a profit margin of 6 percent, a cost of equity of 10 percent and a growth rate of 2.5 percent. Do not round Intermediate calculations. Round your answers to three decimal places. a. What is the forward price-sales multiple? b. What is the trailing price-sales multiple?
Problem 8-11 Assume a company has a payout ratio of 43 percent, a profit margin of 7 percent, a cost of equity of 14 percent and a growth rate of 3.0 percent. Do not round intermediate calculations. Round your answers to three decimal places. a. What is the forward price-sales multiple? b. What is the trailing price-sales multiple?
Attempts: 0 Keep the Highest: 0/3 1. Problem 8-02 eBook Problem 8-02 The Clipper Sailboat Company is expected to earn $3 per share next year. The company will have a return on equity of 18 percent and the company will grow 4 percent in the future. The company has a cost of equity of 16 percent. Given that information, answer the following questions. a. What is the value of the company's stock? Do not round intermediate calculations. Round your answer...
empts: Keep the Highest: /7 Problem 8.06 (Expected Returns) eBook 1 Problem Walk-Through cocks A and B have the following probability distributions of expected future returns: Probability (14%) (30%) 0.1 a. Calculate the expected rate of return, , for Stock B (A - 13.50%.) Do not round intermediate calculations. Round your answer to two decimal places. b. Calculate the standard deviation of expected returns, oa for Stock AO - 18.66%.) Do not round intermediate calculations. Round your answer to two...
Keep the Highest: 0/1 0 Attempts: 3. Problem 8-05 (Nonconstant Growth Valuation) eBook Nonconstant Growth Valuation A company currently pays a dividend of $2 per share (Do= $2) . It is estimated that the company's dividend will grow at a rate of 16 % per year for the next 2 years, and then at a constant rate of 5 % thereafter. The company's stock has a beta of 1.7, the risk-free rate is 9.5 % , and the market risk...
04 End-of-Chapter Problems - Analysis of Financial Statements Back to Assignment Attempts: Keep the Highest: /1 5. Problem 4.05 Click here to read the eBook: Market Value Ratios PRICE/EARNINGS RATIO A company has an EPS of $2.40, a book value per share of $25.68, and a market/book ratio of 1.5x. What is its P/E ratio? The stock price should be rounded to the nearest cent. Round your answer to two decimal places. Grade It Now Save Continue Continue without saving...
Attempts: 2. Problem 7.02 Keep the Highest: V2 Click here to read the eBook: Bond Yields Problem Walk-Through YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 20 years to maturity, and a 8% annual coupon and sells for $1,110. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years...
k to Assignment Attempts: 0 Keep the Highest: 0/2 7. Problem 4.07 Click here to read the eBook: Potential Misuses of Roe ROE AND ROIC Baker Industries' net income is $26,000, its interest expense is $6,000, and its tax rate is 35 %. Its notes payable equals $23,000, long-term debt equals $75,000, and common equity equals $255,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROJC? Round...
eBook Problem 8-02 The Clipper Sailboat Company is expected to earn $4 per share next year. The company will have a return on equity of 15 percent and the company will grow 5 percent in the future. The company has a cost of equity of 12 percent. Given that information, answer the following questions a. What is the value of the company's stock? Do not round intermediate calculations. Round your answer to the nearest cent. b. What is the present...
< Back to Assignment Attempts: 0 Keep the Highest: 0/12 8. Problem 12.08 (New Project Analysis) eBook You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $180,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $85,000. The equipment would require a $12,000 increase in net operating working capital (spare parts inventory). The project would...
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