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Amazing Co. is entering into a 3-year remodeling and expansion project. The construction
will have a limiting effect on earnings during that time, but when it is complete, it should
allow the company to enjoy much improved growth in earnings and dividends. Last year, the
company paid a dividend of $3.40. It expects zero growth in the next year. In years 2 and 3,
5% growth is expected, and in year 4, 15% growth. In year 5 and thereafter, growth should
be a constant 10% per year. What is the maximum price per share that an investor who
requires a return of 14% should pay for Amazing Co.’s ordinary share?
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- Home Place Hotels Inc. is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when completed, it should allow the company to enjoy much improved growth in earnings and dividends. Last year, the company paid a dividend of $3.40. It expects zero growth in the next year. In years 2 and 3, 5% growth is expected, and in year 4, 15% growth. In year 5 and thereafter, growth should be a constant 10% per year. What is the maximum price per share that an investor who requires a return of 14% should pay for Home Place Hotels common stock?Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last year, the company paid a dividend of $4.70. It expects zero growth in the next year. In years 2 and 3, 5% growth is expected, and in year 4, 17% growth. In year 5 and thereafter, growth should be a constant 7% per year. What is the maximum price per share that an investor who requires a return of 16% should pay for Home Place Hotels common stock?Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last year, the company paid a dividend of $3.70.It expects zero growth in the next year. In years 2 and 3, 5% growth is expected, and in year 4, 17%growth. In year 5 and thereafter, growth should be a constant 11%per year. What is the maximum price per share that an investor who requires a return of 16% should pay for Home Place Hotels common stock? The maximum price per share that an investor who requires a return of 16% should pay for Home Place Hotels common stock is $_____________
- Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that time, but when it is complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last year, the company paid a dividend of $2.20.It expects zero growth in the next year. In years 2 and 3, 6% growth is expected, and in year 4, 19% growth. In year 5 and thereafter, growth should be a constant 9% per year. What is the maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels common stock? Round to nearest cent.Home Place Hotels, Inc., is enteringinto a 3-year remodeling and expansion project. The construction will have alimiting effect on earnings during that time, but when it is complete, it shouldallow the company to enjoy much improved growth in earnings and dividends.Last year, the company paid a dividend of $3.40. It expects zero growth in thenext year. In years 2 and 3, 5% growth is expected, and in year 4, 15% growth.In year 5 and thereafter, growth should be a constant 10% per year. What is themaximum price per share that an investor who requires a return of 14% shouldpay for Home Place Hotels common stock?Marian Hotels, Inc., is entering into a 3-year remodelling and expansionproject. The construction will have a limiting effect on earnings during that time, but when it iscomplete, it should allow the company to enjoy much improved growth in earnings and dividends.Last year, the company paid a dividend of $5.00. It expects 3% growth in dividend in years 1, 2, and3. In year 4 and thereafter, growth should be a constant 7% per year. 2What is the maximum price per share that an investor who requires a return of 12% during the initialgrowth period (first 3 years) and a return of 10% during the final growth period should pay forMarian Hotels common stock?
- HP S/ n is entering into 3 yrs remodelling and expansion project. The construction will have a limiting effect on earning during that time ,but when completed ,it sholud allow the company to enjoy much improved growth in earning and dividends .last year ,the company paid a dividend of rm3.40 .it expect zero growth in the next year .in year 2 &3, 5% growth sholud be a constant 10% per year.what is the maximum price share that an investor who require a return of 14% sholud pay for HPH common stock?ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the expected market demand, the company is planning to grow its sales at 15% next year. Since the company is currently operating at full capacity, fixed assets will also grow proportional to sales, same as current assets and current liabilities. However, long-term debt and equity will not grow proportional to sales but rather management will decide upon thier next year level based on an acceptable level of debt to equity ratio as well as ROE ratio. The company has a dividend pay-out ratio of 40% which the management want to maintain in order to meet the shareholders expectations. Below are the financial statements of ABC Inc. for the year ending Sept 2020. Amounts in 000s Sep-20 Sales 5700 Costs 4200 Taxable Income 1500 Taxes (34%) 510 Net Income 990 Amounts in 000s Sept-20 Sept-20 Cash 200 Accounts Payable 2000 Accounts Receivables 1600 Accrued…ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the expected market demand, the company is planning to grow its sales at 15% next year. Since the company is currently operating at full capacity, fixed assets will also grow proportional to sales, same as current assets and current liabilities. However, long-term debt and equity will not grow proportional to sales but rather management will decide upon thier next year level based on an acceptable level of debt to equity ratio as well as ROE ratio. The company has a dividend pay-out ratio of 40% which the management want to maintain in order to meet the shareholders expectations. Below are the financial statements of ABC Inc. for the year ending Sept 2020. In addititon to the planned 15% growth of the next year, the company is considering a future mega project of introducing a new entire production line that can increase its market share by %. The company is planning for this expansion to…
- Company A is growing quickly, with current annual increases of 15% per year in both sales and net income. To fund its growth, it is reinvesting all of its net income each year in new productive opportunities (payout ratio = 0). Yesterday, the firm reported net income of $3.00 per share. This growth is expected to last for another five years (to the end of year 5 on the timeline), at which time they will have exploited most of the available high growth opportunities. The growth rate in net income will then fall to 7% and the firm will adopt a payout ratio of 50% with the first dividend paid at time period 6. If shareholders require a 17% return to hold the firm’s shares, how much would you expect each share to sell for today?Small Fry, Inc. plans to re-invest all of its earnings to expand its operations. Dividends were $2.00 per share this past year and are expected to grow at a rate of 12% per year until the end of year 4. At that time, competitors are likely to bring out the next sensational new vegan product. Analysts predict that at the end of year 4, Small Fry, Inc. will slow down production and dividend growth will slow to 6%. Small Fry’s current cost of capital is 8%. Find the value of Small Fry’s stock today.The company Bacall has forecasted Sales of 11 Million and an operating income of 1Million for the next year. The Net working capital is a 22% of sales, their CAPEX is based on a 6% over Sales. Their expected growth for the next 2 years is a 7% growth on sales and on Operating income. The forecasted depreciation is 7% of Operating income. They have not done a forecast for the year 4 and subsequent, but they expect a cash flow growth of 1.5% forever as from year 4 onwards. The applicable tax rate is 15%. The company has a WACC of 11%. The company has 65.000 shares outstanding, and you are requested to estimate the PE ratio.