Portage Bay Enterprises has 54 million in excess cash, no debt, and is expected to have free cash flow of $15 milion next year Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 13% and it has 6 million shares outstanding, what should be the price of Portage Bay stock?
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- Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming year. You have determined that its present capital structure (80% equity and 20% debt) is optimal, and its net income is forecasted at $140 million. Use the residual distribution approach to determine IWT’s total dollar distribution. Assume for now that the distribution is in the form of a dividend. Suppose IWT has 100 million shares of stock outstanding. What is the forecasted dividend payout ratio? What is the forecasted dividend per share? What would happen to the payout ratio and DPS if net income were forecasted to decrease to $90 million? To increase to $160 million? In general terms, how would a change in investment opportunities affect the payout ratio under the residual distribution policy? What are the advantages and disadvantages of the residual policy? (Hint: Don’t neglect signaling and clientele effects.)Summit Systems will pay a dividend of $1.48 this year. If you expect Summit's dividend to grow by 5.3% per year, what is its price per share if the firm's equity cost of capital is 10.7%? The price per share is $______ (Round to the nearest cent.)Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have free cash flow of $13 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 10% and it has 7 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent.)
- NoGrowth Corporation currently pays a dividend of $0.44 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 15.5%? The stock price is $______ (Round to the nearest cent.)Portage Bay Enterprises has no debt, $1.2 million in cash, and is expected to have free cash flow of $14 million next year. It is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 13% and it has 8 million shares outstanding, what should the price of Portage Bay's stock be? The price of Portage Bay's stock is $129.81 per share. (Round to the nearest cent.)NoGrowth Corporation currently pays a dividend of $2.08 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 14% per year? The price per share if its equity cost of capital is 14% per year is $_______ (Round to the nearest cent.)
- Summit Systems will pay an annual dividend of $1.48 this year. If you expect Summit's dividend to grow by 5.3% per year, what is its price per share if the firm's equity cost of capital is 11.6%? The price per share is $ (Round to the nearest cent) CZONPortage Bay Enterprises has $2.5 million in excess cash, no debt, and is expected to have free cash flow of $10.5 million next year. Its FCF is then expected to grow at a rate of 4.5% per year forever. If Portage Bay's equity cost of capital is 8% and it has 9 million shares outstanding, what should be the price of Portage Bay stock?Summit Systems will pay a dividend of $1.48 this year. If you expect Summit's dividend to grow by 5.8% per year, what is its price per share if the firm's equity cost of capital is 11.3%? The price per share is $ (Round to the nearest cent.)
- NoGrowth Corporation currently pays a dividend of $0.49 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 19.8%? The stock price is $ (Round to the nearest cent) ***Assume Evco, Inc. has a current stock price of $48.64 and will pay a $2.25 dividend in one year; its equity cost of capital is 10%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for $. (Round to the nearest cent.)XYZ company's common shares are selling for P30.00 per share, and the company expects to set its next annual dividend at P1.50 per share. All future dividends are expected to grow by 6% per year, indefinitely. In addition, XYZ faces a floatation cost of 20% on new equity issues. What is the floatation-adjusted cost of equity? Express your answer in percentage.
