Please show steps and NOTE that this is different from just finding intrinsic value. Please be sure to show proper formula
Homework Answers
Cost of equity, ke = Risk free rate + Beta x (Market return - Risk free rate) = 2.7% + 1.12 x (12.4% - 2.7%) = 13.56%
Hence, the intrinsic value
= PV of all the future cash flows
= PV of annual dividend + PV of target price
= Annual dividend / (1 + ke) + Target Price / (1 + Ke)
= 13 / (1 + 13.56%) + 64 / (1 + 13.56%)
= $ 67.80
Hence, the correct answer is the fourth option.
Add Answer to:
Please show steps and NOTE that this is different from just
finding intrinsic value. Please be...
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17....
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank...
Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $16. Dividends have consistently grown at a rate of 3.50%. Analysts estimate that the stock has a beta of 1.41. The current risk-free rate is 2.60% and the market return is 11.1%. Assuming that CAPM holds, what is the intrinsic value of this stock?
Please show work not done on excel. Thanks 16. Finding the WACC. Hankins Corporation has 5.4...
Please show work not done on
excel. Thanks
16. Finding the WACC. Hankins Corporation has 5.4 million shares of common stock outstanding, 290,000 shares of 5.6 percent preferred stock outstanding, and 125,000 of 6.7 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64 per share and has a beta of 1.13, the preferred stock currently sells for $103 per share, and the bonds have 20 years to maturity and sell for 109 percent of...
Please follow instruction/steps. Thank you! For One Population: Show your work for finding Test value, Critical...
Please follow instruction/steps. Thank you!
For One Population: Show your work for finding Test value, Critical value(s), or P-value. For Two Populations: Use your calculator to give the values of Test Value and P-value. . . . o O o Indicate your parameter Indicate the claim List the given information Then start your five steps. Pay attention to the method, such as Traditional or P- value Put the step numbers inside a box For step (1): Indicate Ho Indicate Hi...
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
Please show work not done on
excel. Thanks
16. Finding the WACC. Hankins Corporation has 5.4 million shares of common stock outstanding, 290,000 shares of 5.6 percent preferred stock outstanding, and 125,000 of 6.7 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64 per share and has a beta of 1.13, the preferred stock currently sells for $103 per share, and the bonds have 20 years to maturity and sell for 109 percent of...
Please follow instruction/steps. Thank you!
For One Population: Show your work for finding Test value, Critical value(s), or P-value. For Two Populations: Use your calculator to give the values of Test Value and P-value. . . . o O o Indicate your parameter Indicate the claim List the given information Then start your five steps. Pay attention to the method, such as Traditional or P- value Put the step numbers inside a box For step (1): Indicate Ho Indicate Hi...
Most questions answered within 3 hours.
-
A 1.3 eV electron has a 10-4 probability of tunneling
through a 2.4 eV potential barrier....
asked 15 minutes ago -
What is the one ingredient that is common to being successful
with all stakeholders?
profit
trust...
asked 13 minutes ago -
Write an assembly language 32 bit program that reads in lines of
text by a .txt...
asked 16 minutes ago -
what is the density ( in g/L) of hydrogen gas at 29 degrees C and a...
asked 25 minutes ago -
5-6. You are considering three investment alternatives for some
spare cash: Old Reliable Corporation stock (A1),...
asked 16 minutes ago -
Problem 16-02
Receivables Investment
Medwig Corporation has a DSO of 45 days. The company averages
$7,250...
asked 32 minutes ago -
Mr. Brown hired Lowe's Maintenance Services Limited to repair
and paint the exterior wall of his...
asked 32 minutes ago -
When might an index slow down the overall performance of the
database? Choose the best answer....
asked 37 minutes ago -
Due to a recession, expected inflation this year is only 2.25%.
However, the inflation rate in...
asked 39 minutes ago -
Write four functions: (IN PYTHON 3)
1) bound(l) - given a list of integers l, compute...
asked 41 minutes ago -
A quarterback throws a football. When the football leaves his
hand, it has a horizontal velocity...
asked 49 minutes ago -
he term "reproductive isolation mechanism" refers to
inability of a species to continue reproduction
specific areas...
asked 51 minutes ago