Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A company's current revenue is $62,272 per year. Because new competitors have entered the market, It expects this to decrease by $1,461 per year over the next 9 years. What is the new EUAB if their MARR is 1%?
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- Halliford Corporation expects to have earnings this coming year of $3.26 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% its earnings. It will retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.8% per year. Any earnings that are not retained w be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 10.6%, what price would you estimate for Halliford stock? The stock price will be $ (Round to the nearest cent.)arrow_forwardHalliford Corporation expects to have earnings this coming year of $2.82 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 54% of its earnings. It will then retain 20% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 26.02% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 9.9%, what price would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate rate of return. The price per share is $ (Round to the nearest cent.)arrow_forwardHalliford Corporation expects to have earnings this coming year of $3.36 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 51% of its earnings. It will then retain 21% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.26% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 11.9%, what price would you estimate for Halliford stock? Note: Remember that growth rate is computed as: retention rate x rate of return. The price per share is $. (Round to the nearest cent.)arrow_forward
- Last year, the company's sales were $2,250,000. If sales grow at 6% per year, how large will it be 5 years later? Round-off answer to 2 decimal values. *arrow_forwardNet Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017, and $600,000 in 2018. The expected growth for all years after 2018 is 5%, the 90-Day T-Bill Rate is 20%, and the appropriate percentage above risk-free rate is 12%. Using this information, what is the reasonable value for Company A based on its future income stream for 2014 to 2018? A. 1,394,267.03 B. 4,394,267.03 A or B?arrow_forwardHalliford Corporation expects to have earnings this coming year of $3.33 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 55% of its earnings. It will then retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 21.56% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 10.8%, what price would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate × rate of return. The price per share is $ (Round to the nearest cent.)arrow_forward
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