1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using CAPM2. Calculate the sum of the present value of total dividends for Years +1 through +5. (Dividend based valuation model)3. Compute the present value of continuing value as of the beginning of Year +1 using the dividend valuation model National Co. generated the following total dividends to common equity shareholdersfor the past 3 years20192,837,200453,4223,290,6222020983,632203,8461,187,4782021Common dividends paymentsStock repurchasesTotal dividends1,837,395348,7362,186,131Analysts project 4% growth in earnings over the next five years. Assuming concurrent4% growth in dividends for each of the next five years. In Year +6, total dividends areprojected for National Co. assuming that its income statement and balance sheet willgrow at a long-term growth rate of 2%.At the end of Year 2021, National Co. had a market beta of 0.65. At that time, yieldson intermediate-term Philippine Treasuries were 2.5%. Assume that the marketrequired a 5.0% risk premium. Suppose National Co. had 1,000,000 sharesoutstanding at the beginning of Year +1 that traded at a share price of P55.Use 5 decimal places for the factors.

Name: 1. Calculate the required rate of return on equity National Co. as of
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Description: 1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using CAPM2. Calculate the sum of the present value of total dividends for Years +1 through +5. (Dividend based valuation model)3. Compute the present valu

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1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using CAPM 2. Calculate the sum of the present value of total dividends for Years +1 through +5. (Dividend based valuation model) 3. Compute the present value of continuing value as of the beginning of Year +1 using the dividend valuation model

1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using CAPM 2. Calculate the sum of the present value of total dividends for Years +1 through +5. (Dividend based valuation model) 3. Compute the present value of continuing value as of the beginning of Year +1 using the dividend valuation model

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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