Homework Answers
As sustainable growth rate = retention ratio * ROE
4.52% = RETENTION RATIO * 0.14
Retention ratio = 32.28%
So, dividend payout ratio = 1- 0.3228
= 0.6771
So,
the Earnings* payout ratio = $3.41
Earnings = $5.036
So, P/E = 20
Hence, the price of stock is :
= 20 * $5.036
=$100.72 (rounded off to two decimal places)
Add Answer to:
Question 6 1 pts PQR stock has a sustainable growth rate of 4.52 percent, ROE of...
Joker stock has a sustainable growth rate of 9 percent, ROE of 17 percent, and dividends...
Joker stock has a sustainable growth rate of 9 percent, ROE of 17 percent, and dividends per share of $1.55. If the P/E ratio is 15.5, what is the value of a share of stock? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Share of stock $______
(Common stock valuation) Assume the following the investor's required rate of return is 14.5 percent, the...
(Common stock valuation) Assume the following the investor's required rate of return is 14.5 percent, the expected level of earnings at the end of this year (E1) is $14, the retention ratio is 45 percent, the return on equity (ROE) is 15 percent (that is, it can earn 15 percent on reinvested earnings), and similar shares of stock sell at multiples of 7.096 times eanings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price...
Problem 4-13 Sustainable Growth (LO3] Synyster Corp. has an ROE of 16 percent and a payout...
Problem 4-13 Sustainable Growth (LO3] Synyster Corp. has an ROE of 16 percent and a payout ratio of 24 percent. What is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate
Web Cites Research projects a rate of return of 21 percent on new projects. Management plans...
Web Cites Research projects a rate of return of 21 percent on new projects. Management plans to plow back 45 percent of all earnings into the firm. Earnings this year will be $4.1 per share, and investors expect a 10 percent rate of return on the stock. What is the sustainable growth rate? What is the stock price? What is the present value of growth opportunities? What is the P/E ratio? What would P/E ratio be if the firm paid...
Web Cites Research projects a rate of return of 20 percent on new projects. Management plans...
Web Cites Research projects a rate of return of 20 percent on new projects. Management plans to plow back 30 percent of all earnings into the rm. Earn- ings this year will be $2 per share, and investors expect a 12 percent rate of return on the stock. a) What is the sustainable growth rate? b) What is the stock price? c) What is the P/E ratio? d) What would the price and P/E ratio be if the rm paid...
the investor's required rate of return is 13.5 percent the expected level of earnings at the end of this year (E1) s $6,...
the investor's required rate of return is 13.5 percent the expected level of earnings at the end of this year (E1) s $6, the retention ratio is 40 percent, the return on equity (ROE) is 13 percent (that is, it can earn 13 percent on reinvested earnings), and similar shares of stocks sell at multiples of 7.228 times earnings per share Questions a. Determine the expected growth rate for the dividends. b. Determine the price earnings ratio (P/E1) c. What...
Corporation has a dividend payout ratio of 25 percent and a sustainable growth rate of 12...
Corporation has a dividend payout ratio of 25 percent and a sustainable growth rate of 12 percent. What is the company’s return on equity (ROE)
14. Payout TALI VI 30 percent, what is its sustainable gruwurale. Sustainable Growth [LO3] Based on...
14. Payout TALI VI 30 percent, what is its sustainable gruwurale. Sustainable Growth [LO3] Based on the following information, calculate the sus- tainable growth rate for Kaleb's Heavy Equipment: Profit margin = 7.3% Capital intensity ratio = .80 Debt-equity ratio = .95 Net income = $73,000 Dividends = $24,000 . TYA
Question 13 Tropical Inc. has reported ROE of 0.05 and a dividend payout ratio of 0.7....
Question 13 Tropical Inc. has reported ROE of 0.05 and a dividend payout ratio of 0.7. Its expected earnings for the next year is $4.3 per share, and the market capitalization rate is 0.12. What is Tropical's intrinsic value for today (to)? Assume sustainable growth rate and constant growth DDM. * Round your answer to TWO decimal places.
Question 6 You are considering an investment in ABC company and compile the following information on...
Question 6 You are considering an investment in ABC company and compile the following information on its stock • The market price for the stock is $225/share • The LTM EPS is $15. • Over the past year, ABC paid dividends per share of $12. • The company's P/E is 15, P/B is 15, and P/S is 0.8. • The ROE is 20%, and the profit margin on sales is 10%. • The Treasury bond rate is 4%, the equity...
(Common stock valuation) Assume the following the investor's required rate of return is 14.5 percent, the expected level of earnings at the end of this year (E1) is $14, the retention ratio is 45 percent, the return on equity (ROE) is 15 percent (that is, it can earn 15 percent on reinvested earnings), and similar shares of stock sell at multiples of 7.096 times eanings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price...
Problem 4-13 Sustainable Growth (LO3] Synyster Corp. has an ROE of 16 percent and a payout ratio of 24 percent. What is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate
14. Payout TALI VI 30 percent, what is its sustainable gruwurale. Sustainable Growth [LO3] Based on the following information, calculate the sus- tainable growth rate for Kaleb's Heavy Equipment: Profit margin = 7.3% Capital intensity ratio = .80 Debt-equity ratio = .95 Net income = $73,000 Dividends = $24,000 . TYA
Question 13 Tropical Inc. has reported ROE of 0.05 and a dividend payout ratio of 0.7. Its expected earnings for the next year is $4.3 per share, and the market capitalization rate is 0.12. What is Tropical's intrinsic value for today (to)? Assume sustainable growth rate and constant growth DDM. * Round your answer to TWO decimal places.
Question 6 You are considering an investment in ABC company and compile the following information on its stock • The market price for the stock is $225/share • The LTM EPS is $15. • Over the past year, ABC paid dividends per share of $12. • The company's P/E is 15, P/B is 15, and P/S is 0.8. • The ROE is 20%, and the profit margin on sales is 10%. • The Treasury bond rate is 4%, the equity...
Most questions answered within 3 hours.
-
Which of the following are common negotiation outcome
mistakes?
a. Leave money on the table b....
asked 10 minutes ago -
Propose an efficient synthesis of 2-Bromo-5-nitrotoluene from
benzene. Hint: 3 steps. Consider directing effects of substituents....
asked 16 minutes ago -
Convert the following quantities:
a) 0.819 atm to torr b) 512 mmHg to bar c) 11.2...
asked 36 minutes ago -
C ++ Implement cat command
The purpose of this assignment is to provide practice using the...
asked 38 minutes ago -
we
convert sugars into another form of stored potential energy. This
is called?
asked 1 hour ago -
The manufacturers of Oriental Spice Sauce are concerned that the
sodium levels in their product vary...
asked 1 hour ago -
PLEASE DON'T ANSWER IF YOU CAN'T ANSWER ALL OF THE QUESTIONS. I
DESPERATELY NEED HELP
Consider...
asked 1 hour ago -
DO NOT ANSWER IF YOU ARE UNSKILLED IN THIS AREA! TYPE OR WRITE
EACH ANSWER CLEARLY!!...
asked 1 hour ago -
how many moles of sodium are there in 3.41 moles of the
following compounds
NaCl
Na2SO4...
asked 1 hour ago -
1.1: Draw a position vs. time graph for a sprinter
running a 100 m dash. Label...
asked 1 hour ago -
A uniform electric field exists in a region between two
oppositely charged plates. An electron is...
asked 2 hours ago -
The energy levels of a quantum mechanical system are given by
the equation: En = -hfo/√n^2+9....
asked 2 hours ago