Homework Answers
maximum price of stock = next year EPS * market PE ratio * relative PE ratio next year
maximum price of stock = $3.07 * 16.6 * 1.13 = $57.59
rate of return = (price of stock next year - purchase price) / purchase price
rate of return = ($57.59 - $56.14) / 56.14
rate of return = 2.58%
Add Answer to:
You're thinking about buying some stock in Affiliated Computer Corporation and want to use the P/E...
Round answers to two decimal places. Let's assume that you're thinking about buying stock in West...
Round answers to two decimal places.
Let's assume that you're thinking about buying stock in West Coast Electronics. So far in your analysis, you've uncovered the following information: The stock pays annual dividends of $4.76 a share indefinitely. It trades at a P/E of 11.6 times earnings and has a beta of 1.17. In addition, you plan on using a risk-free rate of 5.00% in the CAPM, along with a market return of 9%. You would like to hold the...
1.) Assume a major investment service has just given Oasis Electronics its highest investment rating, along...
1.) Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock. Here's what you find: This year, Oasis paid its stockholders an annual dividend of $3.68 a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of 12% a...
Let’s assume that you’re thinking about buying stock in West Coast Electronics. So far in your...
Let’s assume that you’re thinking about buying stock in West Coast Electronics. So far in your analysis, you’ve uncovered the following information: The stock pays annual dividends of $5.00 a share indefinitely. It trades at a P/E of 10 times earnings and has a beta of 1.2. In addition, you plan on using a risk-free rate of 3% in the CAPM, along with a market return of 10%. You would like to hold the stock for three years, at the...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation,...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 13 percent, • the expected level of earnings at the end of this year (E1) is $4, • the firm follows a policy of retaining 30 percent of its earnings, • the return on equity (ROE) is 15 percent, and • similar shares of...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation,...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions .the investor's required rate of return is 13 percent, the expected level of earnings at the end of this year (E1) is $8, the firm follows a policy of retaining 40 percent of its earnings, the return on equity (ROE) is 15 percent, and similar shares of stock sell at multiples of...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calcula...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock ur following conditions: • the investor's required rate of return is 12 percent, . the expected level of earnings at the end of this year (E) is $8, • the firm follows a policy of retaining 40 percent of its earnings • the return on equity (ROE) is 12 percent, and Similar shares of stock sell...
Question #4: Stock Valuation and P/E Ratio [16 Points) The research analyst at Needham & Company...
Question #4: Stock Valuation and P/E Ratio [16 Points) The research analyst at Needham & Company believes that Tootsie Roll Industries has a return on equity (ROE) of 11% with a beta (B) of 0.60. Tootsie Roll Industries plans to maintain indefinitely its plowback ratio of 0.58. The firm's earnings this year (E.) were equal to $1.20 per share. The research analyst estimates that the expected return this year for the market E(r.) will equal 12.5% and T-bills will offer...
Suppose you are thinking of purchasing the stock of TTYL Widget, Inc. You expect it to pay...
Suppose you are thinking of purchasing the stock of TTYL Widget, Inc. You expect it to pay a $3.00 dividend in one year. You believe you can sell the stock for $21.00 at that time. You require a return of 15% on investments of this risk. What is the maximum you would be willing to pay? Suppose you are thinking of purchasing the stock of TTYL Widget, Inc. In addition to the dividend and price from year one you expect it to pay a $3.30...
P10-12 (similar to) 3 Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using...
P10-12 (similar to) 3 Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 14 percent, • the expected level of earnings at the end of this year (E1) is $7, • the firm follows a policy of retaining 20 percent of its earnings, . the return on equity (ROE) is 13...
P10-12 (similar to) Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the...
P10-12 (similar to) Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions • the investor's required rate of return is 12 percent, • the expected level of earnings at the end of this year (E) is $8, • the firm follows a policy of retaining 40 percent of its earnings, • the return on equity (ROE) is 12 percent,...
Round answers to two decimal places.
Let's assume that you're thinking about buying stock in West Coast Electronics. So far in your analysis, you've uncovered the following information: The stock pays annual dividends of $4.76 a share indefinitely. It trades at a P/E of 11.6 times earnings and has a beta of 1.17. In addition, you plan on using a risk-free rate of 5.00% in the CAPM, along with a market return of 9%. You would like to hold the...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 13 percent, • the expected level of earnings at the end of this year (E1) is $4, • the firm follows a policy of retaining 30 percent of its earnings, • the return on equity (ROE) is 15 percent, and • similar shares of...
Question 9: (10 points). (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions .the investor's required rate of return is 13 percent, the expected level of earnings at the end of this year (E1) is $8, the firm follows a policy of retaining 40 percent of its earnings, the return on equity (ROE) is 15 percent, and similar shares of stock sell at multiples of...
(Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock ur following conditions: • the investor's required rate of return is 12 percent, . the expected level of earnings at the end of this year (E) is $8, • the firm follows a policy of retaining 40 percent of its earnings • the return on equity (ROE) is 12 percent, and Similar shares of stock sell...
Question #4: Stock Valuation and P/E Ratio [16 Points) The research analyst at Needham & Company believes that Tootsie Roll Industries has a return on equity (ROE) of 11% with a beta (B) of 0.60. Tootsie Roll Industries plans to maintain indefinitely its plowback ratio of 0.58. The firm's earnings this year (E.) were equal to $1.20 per share. The research analyst estimates that the expected return this year for the market E(r.) will equal 12.5% and T-bills will offer...
P10-12 (similar to) 3 Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions: • the investor's required rate of return is 14 percent, • the expected level of earnings at the end of this year (E1) is $7, • the firm follows a policy of retaining 20 percent of its earnings, . the return on equity (ROE) is 13...
P10-12 (similar to) Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions • the investor's required rate of return is 12 percent, • the expected level of earnings at the end of this year (E) is $8, • the firm follows a policy of retaining 40 percent of its earnings, • the return on equity (ROE) is 12 percent,...
Most questions answered within 3 hours.
-
Compare and contrast the linear motion and angular motion
equations F ma and . That is,...
asked 8 minutes ago -
Now that this course has taken you on a journey of introduction
to the world of...
asked 48 minutes ago -
Given a regression sum of squares equal to 2373.59 and a total
sum of squares equal...
asked 1 hour ago -
The sandwich maker of the EE-Cole-Eye Sandwich Truck was just
fired (for a reason described below)...
asked 3 hours ago -
Name the following coordination compounds using systematic
nomenclature.
1. [Co(H2O)6]Cl2:
2. [Cr(NH3)6](NO3)3:
3. K4[Fe(CN)6]:
4. Na[Au(CN)4]:...
asked 2 hours ago -
Propose an efficient synthesis of 2-Bromo-5-nitrotoluene from
benzene. Hint: 3 steps. Consider directing effects of substituents....
asked 4 hours ago -
This assignment will explore the impact of corporate decisions
on a local versus a global perspective....
asked 3 hours ago -
Given the function below, F(w,x,y,z)= x’z+w’z’+w’y
a) draw a logic diagram for an implementation which uses...
asked 3 hours ago -
Most political philosophers believe we have a duty to obey laws,
even if the laws in...
asked 4 hours ago -
Which of the following are common negotiation outcome
mistakes?
a. Leave money on the table b....
asked 4 hours ago -
Convert the following quantities:
a) 0.819 atm to torr b) 512 mmHg to bar c) 11.2...
asked 5 hours ago -
C ++ Implement cat command
The purpose of this assignment is to provide practice using the...
asked 5 hours ago