In the Question what all information given to us is:
Stock selling at (P0) : 60$ Growth Rate is 5% Rf 5%
Earning per share (E0) 8$ Dividend pay out ratio is 40% Rm 6%.
5 18. Union Paper's stock is currently in equilibrium selling at $60 per share. The firm...
please show all work 5. SML A stock is appropriately priced at $40 per share. At this price, the required return is 15% and 15 beta coefficient is 1.2. At this same point in time, the return on the 20-year Treasury is expected to be 3. What is the market risk premium? What should happen to the risk-free rate of return, asset pela coefficient, and required retum on the stock if the market risk premium increases to 12% from an...
Cartwright Brothers’ stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year. The stock’s dividend is expected to grow at a constant rate of 7 percent a year forever. The risk-free rate (kRF) is 7 percent and the market risk premium (kM – kRF) is 5 percent. What is the stock’s beta? a. 5.00 b. 1.00 c. 2.00 d. 3.00 e. 4.00
Cartwright Brothers’ stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year. The stock’s dividend is expected to grow at a constant rate of 7 percent a year forever. The risk-free rate (kRF) is 7 percent and the market risk premium (kM – kRF) is 5 percent. What is the stock’s beta? a. 5.00 b. 1.00 c. 2.00 d. 3.00 e. 4.00
10. You are considering the purchase of a common stock that just paid a dividend of $2.00. You expect this stock to have a growth rate of 30 percent for the next 3 years, then to have a long-run normal growth rate of 10 percent thereafter. If you require a 15 percent rate of retum, how much should you be willing to pay for this stock? a. $97.50 b. $62.68 c. $82.46 d. $79.15 e. $71.27 11. You are given...
plz help with steps shown Fairfax Pizza stock is currently priced at 39.38 dollars per share and is expected to pay its next dividend, which is expected to be 2.65 dollars, in 1 year. The stock has a beta of 0.55. The market has an expected return of 13.76 percent, the risk-free rate is 3.37 percent, and the inflation rate is 2.24 percent. What is the stock price of Fairfax Pizza expected to be in 1 year? Number
Rossdale Co. stock currently sells for $71.11 per share and has a beta of 1.14. The market risk premium is 7.90 percent and the risk-free rate is 3.33 percent annually. The company just paid a dividend of $3.97 per share, which it has pledged to increase at an annual rate of 3.75 percent indefinitely. What is your best estimate of the company's cost of equity? Multiple Choice 8.54% 10.16% 11.78% 10.94% 9.74%
Based on the following information about SOB's common stock, Last dividend per share: $4 Dividend growth rate: 3% Beta for the stock: 1.15 Risk free rate: 5% Market risk premium: 8% What is the expected price per share in 4 years? Select one: a. $47.09 b. $50.54 c. $41.40 d. $44.77 Please explain steps, thank you!
12) Albert's recently paid its annual dividend of $1.98 per share. At that time, the firm announced that all future dividends will be increased by 2.2 percent annually. What is the firm's cost of equity if the stock is curently selling for $28.40 a share? A) 11.32 percent В) 9.33 реrcent C) 11.08 percent D) 10.06 percent E) 10.47 percent 12) 13) 13) The cost of equity for RJ Corporation is 8.4 percent and the debt-equity ratio is .6. The...
Ebey’s Enterprises has a beta of 2. The stock is currently selling for $12 a share. The overall stock market has a10 percent rate of return and a risk premium of 8 percent. What is the firm’s cost of equity? Group of answer choices 2% 20% 6% 22% 18%
XYZ currently has common stock trading at $40 per share. XYZ just paid a dividend of $2.00 per share, which is expected to grow at a constant rate of 5%. XYZ's beta is 1.5, the risk-free rate is 2%, and the market return is expected to be 8%. The pre-tax yield on XYZ's bonds is 7%. XYZ's finance department believes that new stock would require a premium of 5% over their own bond yield. Flotation cost for issuing new stock...