The market capitalization rate on the stock of Aberdeen Wholesale Company is 7%. Its expected ROE is 8%, and its expected EPS is $3. If the firm's plowback ratio is 75%, its P/E ratio will be Multiple Choice 25.00 29.00 సె 100.00 20.00
Q: TargetCo has earnings per share of $5.50, 4 million shares, and a price per share of $55. If…
A: Expected Market price = PE multiple * Earnings per share = 15 * 5.5 = 82.5
Q: If flotation cost is 1%, what is the cost of preferred stock that sells for $81 per share and has a…
A: The cost of the preferred stock refers to the amount the pays in return for the gains it received by…
Q: Welltodo Ltd has the following capital structure, which it considers to be optimal: debt = 15%,…
A: Note : Dividend Discount Model applies to those companies who use to pay dividends and Capital Asset…
Q: A firm will start paying dividend of $3 per year from year-3. The return on equity is 15% and the…
A: Sustainable Growth Rate = Return on Equity * (1 - payout ratio) Sustainable Growth rate = 0.15*( 1 -…
Q: Calculating Cost of Equity: Stock in Daenery’s Industries has a beta of 0.95. The market risk…
A: Calculation of Cost of Equity using dividend growth model:
Q: Suppose Sohar, Inc., reports earnings per share of around (OMR 0.75). If Sohar is in an industry…
A: P/E Ratio is also known as the price-earning ratio which states the comparison of market price and…
Q: In practice, a common way to value a share of stock when a company pays dividends is to value the…
A: Common stock is a financial security that depicts an ownership claim to a corporation. The price of…
Q: A company expects EPS to be $8.81 next year. The industry average P/E ratio is 34.84 and Enterprise…
A: The method of comparables means the relevant ratios of industry, peer groups or similar kind of…
Q: the investor's required rate of return is 14 percent, the expected level of earnings at the end of…
A: Given, P/E ratio = 9.091 times Required rate of return , Ke= 14% Expected level of earnings, E1 =…
Q: RAK, Inc., currently has an EPS of $1.70 and an earnings growth rate of 8.5 percent. If the…
A: Formulas: Year 5 EPS = Current EPS *(1+rate)^years
Q: Malik Brothers has a stock price of $45. In the fiscal year just ended, dividends were $2.00.…
A: Given:Malik Brothers, stock price of $45At the end of first year, dividend =$2EPS And Dividend…
Q: Under peso-cost averaging, an investor will purchase P26,500 worth of stock each year for 5 years.…
A: The shares are the unit of equity ownership of a company. The company uses shares to issue capital…
Q: Company ABC forecasts to have an earning per share of $8 next year. If the company distributes all…
A: Excel Spreadsheet:
Q: Stock in Jansen Industries has a beta of 1.05. The market risk premium is 7 percent, and T-bills are…
A: Cost of equity is computed using the capital assets pricing model- Where Ke stands for the cost of…
Q: Castle-in-Sand generates a rate of return of 20% on its investments and maintains a plowback ratio…
A: It is given that the rate of return on investment is 20% and plowback or retention ratio is 0.30…
Q: The market value of Fords' equity, preferred stock, and debt are $6 billion, $2 billion, and $11…
A: Weighted Average Cost of Capital (WACC) is the rate at which the company is willing to pay to its…
Q: Baximco pharma is currently selling for tk125 per share and pays tk. 12 in dividend. Investors…
A: The expected growth rate is the growth rate at which the price of stock as well as dividend…
Q: Tina's Track Supply's market-to-book ratio is currently 4.5 times and PE ratio is 10.5 times. If…
A: Market to book ratio is an important ratio in finance. This ratio compares a company’s book value to…
Q: The current market price of Venus Filters Ltd is Rs.67. The expected dividend after a year is…
A: Market price = Dividend next year / (Required return - growth rate) Required return = Dividend…
Q: Investment bankers at Cowen & Co. announced that the stock of Planet Fitness (ticker: PLNT) has a…
A: Introduction US T bills: These are the government-issued securities, promised with a risk-free…
Q: A company has a return on equity of 32 percent and plowback ratio of 50 percent. If the earnings of…
A: The Stock price is the current price of the share that is available in the stock market.
Q: The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE…
A: Constant growth model is also regarded as Gordon Growth model which is used to determine the stock…
Q: Smathers Corp. stock has a beta of 1.24. The market risk premium is 6.90 percent and the risk-free…
A: Using CAPM
Q: dust Telecommunications, Inc has the following target capital structure, which it considers to be…
A: Weighted average cost of capital is the weighted cost of equity, preferred stock and debt to be used…
Q: Ingram Micro Company forecasts income of $7.40 per share and will pay out 30% as dividends, 20% as a…
A: Income= $7.40 per share Dividend Payment= 30% Share repurchase= 20% Growth rate= 5.6 % Required…
Q: You forecast to have a ROE of 14%, and dividend payout ratio of 12%. Currently the company has a…
A: PEG ratio is the ratio of price by earning divided by growth of earning . formula: PEG=P/E…
Q: Dudley Hill Golf Club’s market-to-book ratio is currently 2.5 times and the PE ratio is 6.75 times.…
A: Market value ratios show the relation between share value, book value and earnings. Some common…
Q: the investor's required rate of return is 14 percent, the expected level of earnings at the end of…
A: Given, Retention ratio, b = 60% Return on equity, r = 16% Expected earnings, E1 = $8 Investor's…
Q: Hypothetics Inc. has just paid the annual dividend to shareholders based on $5 earnings per share…
A: Last EPS = $5 Plowback ratio = 40% Payout ratio = 100%-Plowback ratio =…
Q: The common stock of Anthony Steel has a beta of 0.80. The risk-free rate is 5 percent and the…
A: Cost of equity : As per capital asset pricing Cost of equity is calculated by the use of risk free…
Q: The Nixon Corporation's common stock has a cost of capital of 12 percent. If the market risk premium…
A: The capital structure of a corporation is the combination of the sources of financing through which…
Q: "The market capitalization rate on the stock of Aberdeen Wholesale Company is 11%, Its expected ROE…
A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…
Q: You forecast the company A’s future earning is going to be $5.34 per share. The current market price…
A: PE ratio ratio measures current price of the company to its earning per share. formula: PE = CURRENT…
Q: The market capitalization rate on the stock of Aberdeen Wholesale Company is 14%. Its expected ROE…
A: A ratio that provides information regarding the share price of a company by relating it to the…
Q: Suppose a firm is operating in 2 periods. The shareholders are expecting to receive $100,000…
A: The current price and value of the stock refer to the market value of the stocks. The market value…
Q: Currently a firm is earning $6 per share. The pay-out ratio is 60% and it will remain same. If the…
A: Retention ratio is the ratio that denotes the proportion of profit which has been retained by the…
Q: The market value of Fords' equity, preferred stock and debt are $8 billion, $2 billion, and $15…
A: Cost of Equity is calculated by Capital Asset Pricing Model. Cost of Equity Ke = Risk free rate +…
Q: Under peso-cost averaging, an investor will purchase P6,000 worth of stock each year for three…
A: The peso-cost averaging is a method of investing in stocks where a particular amount is set aside…
Q: A company expects EPS to be $2.52 next year. The industry average P/E ratio is 23.99 and Enterprise…
A: The price to earning ratio is calculated as the ratio of market price of stock and earning per…
Q: Castle-in-Sand generates a rate of return of 20% on its investments and maintains a plowback ratio…
A: Growth rate= Return on equity*Plowback ratio = 0.20*0.30 = 0.060 or 6.00% Dividend= EPS*(1-Plowback…
Q: Suppose Kaspi Bank is trading share at 25$ today. The company pays dividend of 0.25. The analysts…
A: An expected return is referred as the profit or loss, where an investor used to anticipate on…
Q: The stock of North American Danduff Company is selling at $80 per share. The firm pays a divdend of…
A: Given Information: Stock price - $80 per share Dividend - $2.50 per share
Q: Pixieedust Telecommunications, Inc has the following target capital structure, which it considers to…
A: Preferred Stock is that type of stock that possesses both equities and debt features. It is also…
Q: Sisters Corp expects to earn $6 per share next year. The firm's ROE is 15% and its plowback ratio is…
A: In this question we require to calculate the current stock price. According to dividend discount…
Q: MF Corp. has an ROE of 14% and a plowback ratio of 75%. The market capitalization rate is 13%. a. If…
A: Given:
Q: TTY currently pays a dividend of Ghc1.60 per year. A current price is Ghc118.36. An analyst makes…
A: Dividend Now=D0=1.6 Dividend next =D1=1.6(1.14)=1.824 D2=1.824(1.14)=2.079 D3=2.079(1.12)=2.32…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- You forecast to have a ROE of 14%, and dividend payout ratio of 12%. Currently the company has a price of $30 and $7 earnings per share. What is the PEG ratio based on market price?The market capitalization rate on the stock of Aberdeen Wholesale Company is 11%. Its expected ROE is 12%, and its expected EPS is $8. If the firm's plowback ratio is 65%, its P/E ratio will be? if you can add the steps and formulas through excelThe market capitalization rate on the stock of Aberdeen Wholesale Company is 14%. Its expected ROE is 15%, and its expected EPS is $6. If the firm's plowback ratio is 60%. Calculate its P/E ratio.
- You forecast the company A’s future earning is going to be $5.34 per share. The current market price is $55. What the market forward PE ratio? The estimated growth rate is 10%, what is the PEG ratio based on your estimate of growth rate? The industry average has a P/E ratio of 14 and growth rate of 12%, what does it mean for A’s stock price?8. The market capitalization rate on the stock of Aberdeen Wholesale Company is 14%. Its expected ROE is 20% and its expected EPS is $5.00. If the firm's plow-back ratio is 30%, its P/E ratio is 8.75 11.67 19.23 24.15 None of the aboveYou have assigned the following values to these three firms: Upcoming Dividend $0.50 Estee Lauder Kimco Realty Nordstrom Price $36.00 75.00 11.00 1.58 2.00 Estee Lauder required return Kimco Realty required return Nordstrom required return Assume that the market portfolio will earn 17.20 percent and the risk-free rate is 8.20 percent. Compute the required return for each company using both CAPM and the constant-growth model. (Do not round intermediate calculations and round your final answers to 2 decimal places.) CAPM Growth 11.40% 17.00 8.80 % % % Beta 0.92 1.28 1.24 Constant-Growth Model % % %
- Here are data on two companies. The T-bill rate is 5.6% and the market risk premium is 7.1%. $1 Discount Store Everything $5 13% 18% Company Forecast return. Standard deviation of returns Beta Company $1 Discount Store Everything $5 Expected Return 14% 16% Required: What would be the expected rate of return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 decimal places.) % % 1.6 1.0Company Q has earnings of $3.00 per share, a market price of $25, and a beta of 1.25. The risk-free rate is 3% and the risk premium for the market as a whole is 5%. a. What is the expected return on the market? b. What is the current P/E ratio for Company Q?Consider the following for a firm. Its stock price (P0) is at $50, its payout ratio (POR) is 0.4, its EPS1 is $2.00, and investor required return is 10%.. What is the percent of capital gains?DONOT SOLVE ON EXCEL USE PROPER FORMATE
- The market capitalization rate for Admiral Motors Company is 7%. Its expected ROE is 12% and its expected EPS is $6. The firm's plowback ratio is 50%. Required: a. Calculate the growth rate. (Input your answer as a nearest whole percent.) b. What will be its P/E ratio? (Do not round intermediate calculations.)You have assigned the following values to these three firms: Upcoming Dividend US Bancorp Praxair Eastman Kodak Price $ 29.80 59.15 36.50 $ 3.20 1.51 1.00 US Bancorp required return Praxair required return Eastman Kodak required return CAPM Growth 8.80% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 5.70 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. % % % 13.00 11.50 Beta 1.59 2.20 0.98 Constant-Growth Model % % %The current risk-free rate of return is 4.6%. The market risk premium is 6.6%. D'Amico Co. has a beta of 1.56. Using the Capital Asset Pricing Model (CAPM) approach, D'Amico's cost of equity is ... .··. ··· .... .··. .··...