A firm's current market value of equity is $20 million. It has one million shares outstanding. The firm's equity multiplier is one, and it had sales of $50 million last year. Its profit margin was 5%. What is the firm's implied price- earnings ratio? a. 40 b. 5 c. 16 d. 20 e. 8
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- Suppose that a company's most recent dividends per share paid upon the last year's net income was $1.6 . The share price of the company is fairly valued in the market at $10 . The expected dividend growth rate is 2% in perpetuity. Given that the risk-free rate is 3% and market risk premium is 10%, what happens to the share prices when the whole market increases by 10%? a) increase by 15.32%b) increase by 15.00%c) increase by 11.79%d) increase by 21.89%e) otherYou are given the following information about a firm: The growth rate equals 8 percent; return on assets (ROA) is 10 percent; the debt ratio is 20 percent; and the stock is selling at $36. What is the return on equity (ROE)?a. 14.0%b. 12.5%c. 15.0%d. 2.5%e. 13.5%A firm is expected to pay a dividend of $3.90 one year from now and $4.25 two years from now and $4.30 three years from now. The firm's stock price is expected to be $110.50 in four years. What is the firm's stock value using a 13.78% required return? ○ $75.56 $201.47 $73.36 ○ $65.93
- You forecast the company A’s future earning is going to be $5.34 per share. The current market price is $55. What the market forward PE ratio? The estimated growth rate is 10%, what is the PEG ratio based on your estimate of growth rate? The industry average has a P/E ratio of 14 and growth rate of 12%, what does it mean for A’s stock price?Currently a firm is earning $6 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%. If the growth rate will settle to 4% after 4-years from now, compute the current price of share. a. 60.91 b. 66.18 C. 50.82 d. 79.28Currently a firm is earning $6 per share. The pay-out ratio is 60% and it will remain same. If the ROE of the firm is 15% and required rate of return on equity is 13%, find the price of stock 10- years from now. a. $51.43 b. $ 54.51 c. $ 92.10 d. $ 97.63
- Topstone Industries just paid an annual dividend of $2.00 per share this year. This dividend, along with the firm's earnings, is expected to grow at a rate of 5% per annum forever. If the current market price for a share of Topstone is $38.61, what is the implied cost of equity?O A. 5.36% B. 10.18% . 11.22% D. 10.44 % 0 E 10.71%Company has the following dividend stream. D1 = 3.82 D2 = 4.41 D3 = 5.81 Dividend is expected to be constant after year 4, with a growth rate of 4%. The cost of equity is 10%. What is the stock price, P0 , today?Company XYZ is investors expect earnings and dividends to grow at a constant rate of 8% in the future dividend is expected to be paid at the rate of $3.40 per share next year, and its stock currently sells at a price of $60 per share. Calculate the cost of Common equity?
- The current share price of Victoria Plc. is $49. The company has just paid a dividend of $2.5 per share. Dividends are expected to rise by 5 percent per year indefinitely. The company is in a higher systematic risk class than the average share.a. Calculate the intrinsic value of one share of Victoria Plc. if the required rate of return is 15 percent.b. What is the cost of equity capital of Victoria Plc.?The dividend per share was P27 last year while the current market price of the shares is P135. The growth rate of equity isexpected to be 8%.3. How much the current cost of equity?A firm's stock is selling for $85. The dividend yield is 5.5%. A 8% growth rate is expected for the common stock. The firm's tax rate is 32%. What is the firm's cost of common equity?