A: Using financial calculator
Input: FV = 7.82
PV = 4.66
N= 5
Find I/Y as 10.91
Hence growth rate is 10.91%
B: D0= EPS*40% = 7.82*40%=3.13
D1 = D0*(1+g)
= 3.13*(1+0.1091)
=$3.47
C: Share price = D1/(Rs-g)
36= 3.47/ (Rs- 0.1091)
Rs= 20.55%
11. Problem 9-11 Problem Walk-Through Problem 9-11 Cost of Equity Radon Homes' current EPS is $7.82....
eBook Problem Walk-Through Cost of Equity Radon Homes' current EPS is $7.90. It was $3,61 5 years ago. The company pays out 50% of its earnings as dividends, and the stock sells for $32. a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places b. Calculate the next expected dividend per share, D. (Hint: Do - 0.50($7.90) - $3.95.) Assume that the past...
Cost of Equity Radon Homes' current EPS is $7.50. It was $4.99 5 years ago. The company pays out 40% of its earnings as dividends, and the stock sells for $30 a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. b. Calculate the next expected dividend per share, D1. (Hint: Do 0.40($7.50) $3.00.) Assume that the past growth rate will continue. Do...
Cost of Equity Radon Homes' current EPS is $7.50. It was $4.99 5 years ago. The company pays out 40% of its earnings as dividends, and the stock sells for $30. a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Do not round intermediate calculations. Round your answer to two decimal places. % b. Calculate the next expected dividend per share, D1. (Hint: Do = 0.40($7.50) = $3.00.) Assume that the past growth rate...
Problem 9-11 Cost of Equity Radon Homes's current EPS is $7.80. It was $4.43 5 years ago. The company pays out 50% of its earnings as dividends, and the stock sells for $30. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % Calculate the next expected dividend per share, D1 (Hint: D0 = 0.50($7.80) = $3.90). Assume that the past growth rate will continue. Round your...
Radon Homes' current EPS is $6.45. It was $4.51 5 years ago. The company pays out 50% of its earnings as dividends, and the stock sells for $36. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % Calculate the next expected dividend per share, D1 (Hint: D0 = 0.50($6.45) = $3.23). Assume that the past growth rate will continue. Round your answer to the nearest cent. $ ...
Cost of Equity Radon Homes's current EPS is $6.57. It was $4.38 5 years ago. The company pays out 60% of its earnings as dividends, and the stock sells for $30. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % Calculate the next expected dividend per share, D1 (Hint: D0 = 0.60($6.57) = $3.94). Assume that the past growth rate will continue. Round your answer to the...
4. Problem 10.04 (Cost of Equity with and without Flotation) eBook 1 Problem Walk-Through Jarett & Sons's common stock currently trades at $22.00 a share. It is expected to pay an annual dividend of $3.00 a share at the end of the year (D1 = $3.00), and the constant growth rate is 6% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your...
The Bouchard Company's EPS was $6.96 in 2016, up from $3.34 in 2011. The company pays out 45% of its earnings as dividends, and its common stock sells for $33. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. % The last dividend was D0 = 0.45($6.96) = $3.13. Calculate the nextexpected dividend, D1, assuming that the past growth rate continues. Do not round off intermediate calculations. Round...
Save Submit Assignment for Grading Jestions Check My Work (1 remaining) Problem Walk-Through Problem 10-4 Cost of Equity with and without Flotation Jarett & Sons's common stock currently trades at $34.00 a share. It is expected to pay an annual dividend of $1.00 a share at the end of the year (D: = $1.00), and the constant growth rate is 3% a year a. What is the company's cost of common equity if all of its equity comes from retained...
11. Problem 9.13 (Constant Growth) eBook . Problem Walk-Through You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.50 a share at the end of the year (D1 = $2.50) and has a beta of 0.9. The risk-free rate is 5.2%, and the market risk premium is 4.5%. Justus currently sells for $50.00 a share, and its dividend is expected to grow at some constant rate, 9. Assumi the market is in...