a firm is expected to earn $8 per share . the pay-out ratio is 60%and it will remain same. if the ROE of the firm is 25% and required rate of return on equity is 13% find the present value of growth

Q: Assume that the average firm in your company's industry is expected to grow at a constant rate of 6%…

A: The Dividend Discount Model (DDM) is a method used to value the stock price of a company by…

Q: Remember that the value of a firm with cost of equity R and dividend growth g is given by…

A: The value of a firm refers to the worth of the overall firm, it is computed by taking into account…

Q: Firm B has a capital intensity ratio of 2,optimal debt equity ratio of 1.5, and dividend payout…

A:

Q: ARN has come out with a new and improved product. As a result, the firm projects an ROE of 25%, and…

A: Present value of growth opportunity is a valuation techniques which determines the price of the…

Q: Suppose you are told that returns on Treasury Bills are currently at 5% and the market returns is…

A: This question has two parts: In part (a) we need to compute the expected required rate of return for…

Q: The market capitalization rate for Admiral Motors Company is 7%. Its expected ROE is 12% and its…

A: market capitalization rate = r = 7%Return on Equity = ROE = 12%Earning Per Share = EPS = $6plowback…

Q: Need answer of this question

A: Answer:To find the profit margin, we need to use the relationship between the sustainable growth…

Q: A firm has expected cash flows next year of $1100 and expected interest expense of $250. The…

A: The APV method values the firm by considering the value of its unleveraged cash flows (or "firm…

Q: Assume that a firmʹs earnings are expected to be $11 million next year and that this number is…

A: A ratio that provides information regarding the share price of a company by relating it to the…

Q: What is the minimum attractive rate of return if one third of the capital of a firm is borrowed at…

A: Given Information :  Weight of borrowed fund = 1/3 Weight of equity capital = 2/3 Cost of borrowed…

Q: The FMS Corporation needs to raise investment money amounting to $40 million in new equity. The…

A: Cost of equity is the required rate of return shareholders expect from the company in order to…

Q: need answer

A: Step 1:Given Information:Desired growth rate (g) = 13%Debt-equity ratio (D/E) = 0.5Profit margin…

Q: A firm that is currently unlevered has WACC = rS = 10%/year. This company plans to do a…

A: The objective of the question is to calculate the cost of equity (rS) after the firm's…

Q: Next year’s expected firm earnings are $8,000, shares outstanding 2000, ROE=16% required rate of…

A: Share price: The share price is the price of the share at which any individual can purchase such a…

Q: A firm wants a sustainable growth rate of 3.68 percent while maintaining a dividend payout ratio of…

A: The formula to calculate the sustainable growth rate is:368.The given value of dividend payout…

Q: El Nino Sprinkler Systems has a 25% ROE based on beginning equity and a 45% payoutratio. At what…

A: The sustainable growth rate is calculated below:

Q: Mexican Motors’ market cap is 600 billion pesos. Next year’s free cash flow is 15.0 billion pesos.…

A: The return received from an investment is known as the rate of return over a particular period of…

Q: firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value?…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: What is the value of equity, if the dividend at present(Do) is 10 dollarsr, required rate of return…

A: The share price is the current market price of the share. It is the price of the share at any…

Q: Compute the present value of growth opportunities if the dividend payout ratio is 35%, the return on…

A: Here, Dividend Pay-out Ratio is 35% EPS is $5 Risk Free Rate is 4.2% Company's Risk Premium 5%…

Q: A company expects a 20% return on equity invested entirely in new projects. The company's management…

A: Return on equity = 20%Retention ratio =30%Earnings per share = €3Expected return  = 12%

Q: The market capitalization rate for Admiral Motors Company is 10%. Its expected ROE is 15% and its…

A: market capitalization rate = r = 10%Return on Equity = ROE = 15%Earning Per Share = EPS = $7plowback…

Q: A firm wishes to maintain an sustainable growth rate of 12 percent and a dividend payout ratio of 50…

A: ROE provides investors with valuable insights into a company's profitability, management…

Q: what is the Present Value of Growth Opportunities (PVGO) if the company reinvests 25% of its…

A: Present Value of Growth Opportunities (PVGO) is a concept that gives analysts a different approach…

Q: Provide solution for this question

A: Step 1: Step 2: Step 3: Step 4:

Q: The market capitalization rate for Admiral Motors Company is 6%. Its expected ROE is 10% and its…

A: This question is based on financial ratios and its use and application to determine valuation…

Q: Need help with this question

A: Understanding the Problem and Given Information We're tasked with finding the profit margin of a…

Q: our company has just successfully completed some work that leads you to expect that its earnings and…

A: In this we have to calculate present value of dividend and intrinsic value of stock.

Q: Greshak Ltd. forecasts its long-term sustainable growth rate to be 4.0%. If the firm's required rate…

A: Given details are : Sustainable growth rate (g) = 4% = 0.04 Required rate of return (r) = 12% = 0.12…

Q: Provide correct solution of this question

A: Step 1: Given data :Retention Ratio (b): 33% or 0.33Sustainable Growth Rate (g): 8.80% or…

Q: A firm's stock is selling at 15 pesos. They just paid a 2 peso peso dividend and are expected to…

A: Capital gains yield: Capital gains yield measures the gain or loss with the difference between the…

Q: A company projects a rate of return of 20% on new projects. The executive team plan to plow back 20%…

A: A company projects a rate of return of 20% on new projects. The executive team plan to plow back 20%…

Q: Consider a firm that just paid a dividend of $5.50 per share. The company expects growth in the…

A: Dividend in Year 1: $5.50 * (1 + 17%) = $6.44Dividend in Year 2: $6.44 * (1 + 17%) = $7.53Dividends…

Q: XYZ Corp. is anticipating a sustained growth rate of 15% per year. Is it possible for them to…

A: Profit margin = 5.3%Debt equity ratio = 0.40Capital intensity ratio = 0.75As per DuPont equation,…

Q: I want to answer the question

A: The sustainable growth rate is given by:SGR =ROE×bwhere b is the retention ratio (also known as the…

Q: A firm has a plowback ratio (retention rate) of 0.5 and ROE of 15%. Its current earning is BDT 5 per…

A: EPS = BDT 5 Plowback ratio = 0.50 Payout ratio = 1-Plowback ratio                      = 1-0.50…