Aaron Inc. has 344 million shares outstanding. It expects earnings at the end of the year to be $575 million. The firm's equity cost of capital is 12%. Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 6% per year, what is Aaron's share price? OA. $20.90 OB. $6.97 OC. $27.86 OD. $13.93
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- Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?Aaron Inc. has 301 million shares outstanding. It expects earnings at the end of the year to be $602 million. The firm's equity cost of capital is 10%. Aaron pays out 50% of it's earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 7% per year, what is Aaron's share price?Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow by 6% per year, what is its price per share if its equity cost of capital is 11%?
- Summit Systems will pay an annual dividend of $1.56 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 10.9%? The price per share is $ (Round to the nearest cent.) MJ Aaron Inc. has 307 million shares outstanding. It expects earnings at the end of the year to be $570 million. The firm's equity cost of capital is 10%. Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 5% per year, what is Aaron's share price? OA. $9.29 OB. $27.86 OC. $18.57 OD. $37.14Chittenden Enterprises has 632 million shares outstanding. It expects earnings at the end of the year to be $940 million. The firm's equity cost of capital is 10%. Chittenden pays out 30% of its earnings in total: 20% paid out as dividends and 10% used to repurchase shares. If Chittenden's earnings are expected to grow at a constant 4% per year, what is Chittenden's share price?
- BM expects to pay a dividend of $8 next year and expects these dividends to grow at 3.15% a year. The price of IBM is $67 per share. What is IBM's cost of equity capital?Sora Industries has 62 million outstanding shares, $124 million in debt, $47 million in cash, and the following projected free cash flow for the next four years: a. Suppose Sora's revenue and free cash flow are expected to grow at a 3.6% rate beyond year four. If Sora's weighted average cost of capital is 14.0%, what is the value of Sora stock based on this information? b. Sora's cost of goods sold was assumed to be 67% of sales. If its cost of goods sold is actually 70% of sales, how would the estimate of the stock's value change? c. Return to the assumptions of part (a) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, the firm reduces its selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses, except taxes, are affected.) d. Sora's net working capital needs were estimated to be 18% of sales (their current level in year zero). If Sora can reduce this requirement…Valence Electronics has 215 million shares outstanding. It expects earnings at the end of the year of $800 million. Valence pays out 40% of its earnings in total-15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are expected to grow by 5% per year, these payout rates do not change, and Valence's equity cost of capital is 9%, what is Valence's share price? A. $5.58 O B. $37.21 OC. $29.77 OD. $11.16
- 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) CZONABC Corporation paid $5 dividends per share last year. Dividends will grow by 10% and then 8% in the first two years. Its growth rate will be 5% on the third year and onwards. If EFG Corporation requires a minimum return on 15% on its investment in ABC shares, how would EFG currently value a share of ABC Corporation?Summit Systems will pay a dividend of $1.55 this year. If you expect Summit's dividend to grow by 5.5% per year, what is its price per share if the firm's equity cost of capital is 10.9%? The price per share is $. (Round to the nearest cent.)