Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog lookglamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the valuesprovided are from year-end 2021. Also assume that the firm's equity beta is 1.50, the risk-free rate is 2.70 percent, and the market riskpremium is 7.0 percent.Dividends per shareReturn on equityBook value per share2021 value per shareAverage price multipleForecasted growth rate$ 2.289.50%$18.85Using PE ratioUsing P/CF ratioUsing P/S ratioEarnings$5.0013.1013.60%Share PriceCash Flow$6.309.5411.29%Using the PE, P/CF, and P/S ratios, estimate the 2022 share price for Beagle Beauties.Note: Do not round intermediate calculations. Round your answers to 2 decimal places.Sales$25.652.487.37%

EarningsCash flowsSales2021 value per share$5.00$6.30$25.65Forecasted growth…

Answered: Beagle Beauties engages in the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Match the following A premium over and above the risk-free rate. ✓ The computed cost of capital determined by multiplying the cost of each item in the optimal capital structure by its weighted representation in the overall capital structure and summing the results A measure of the amount of debt used in the capital structure of the firm Superior growth of a firm may achieve during its early years, before leveling off to a more normal growth ✓ The earnings available to common stockholders divided by the number of common stock shares outstanding ✓ A line or equation that depicts the risk-related return of a security based on risk-free rate plus a market premium related to the beta coefficient of the security A measure of the spread or dispersion of a series of numbers around the expected value A model for determining the value of a share of stock by taking the present value of an expected stream of future dividends. A. Supernormal Growth B. Market Risk Premium C. Financial Leverage D.…
Would it be better to estimate your own equity betas for Tile Shop Holdings inc or use beta estimates that arepublically available for many listed companies? If you do your own estimates should you use five-years ofmonthly holding period returns data or three-years of weekly holding period returns data? What should you use as the surrogate for the corresponding market returns and should you regress holding period returns or holding periodpremiums? Don't have to solve it like use equations. Just explain reasoning
Given the following information for the stock of Foster Company, calculate the risk premium on its common stock. Current price per share of common stock $47.02 Expected dividend per share next year $2.46 Constant annual dividend growth rate 5.9% Risk-free rate of return 3.9% The risk premium on Foster stock is ___%
Please solve b and c.
Nikul
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2021. Also assume that the firm's equity beta is 1.30, the risk-free rate is 2.55 percent, and the market risk premium is 7.0 percent. Dividends per share. Return on equity Book value per share 2021 value per share. Average price multiple Forecasted growth rate $ 2.22 9.50% $18.40 Share price Earnings $ 5.00 13.10 13.57% Cash Flow $ 6.50 9.51 11.32% Sales $25.65 2.45 7.17% The sustainable growth rate is 5.282 percent, and the required return is 11.65 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Use the dividend discount model to value a share of Toyota’s stock (ticker symbol: TM) as of December 31, 2021. In your application of this model, use the data provided on the most recent Toyota Value Line report to estimate the necessary dividend payment and the firm’s equity beta. Assume, that the expected growth rate of dividends in perpetuity (g) ranges from 2.5% to 3.5%/year.
An analyst produces the following series of annual dividend forecasts for company D: Expected dividend (end of) year t+1 = 10 euros; Expected dividend (end of) year t+2 = 20 euros; Expected dividend (end of) year t+3 = 10 euros. The analyst further expects that company D dividend will grow indefinitely at a rate of 2 percent after year t+3. Company D cost of equity equals 10 percent. Under these assumptions, calculate the analysts estimate of company D equity value at the end of year t.
Given the following information for the stock of Foster Company, calculate the risk premium on its common stock. Current price per share of common stock $37.01 Expected dividend per share next year $1.39 Constant annual dividend growth rate 8.4% Risk-free rate of return 5.2%
You are considering purchasing a share of preferred stock with the following characteristics: par value = $100 dividend rate = 12% per year payment schedule = quarterly maturity date = required rate of return = 6% per year current market price = $135 per share Based on this information, answer the following: A. What is the dollar amount of the quarterly dividend on this stock? B. Using the Discounted Cash Flow Method, what is the dollar value of this stock? C. Using the Discounted Cash Flow Method, what is the annual expected return for this stock? D. Based on your answer to part B, should you invest in the stock? Why or why not? E.…
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm’s equity beta is 1.20, the risk-free rate is 2.65 percent, and the market risk premium is 7.0 percent. Dividends per share $ 2.26 Return on equity 9.50 % Book value per share $ 18.70 Earnings Cash Flow Sales 2019 value per share $ 5.00 $ 6.30 $ 25.65 Average price multiple 13.10 9.53 2.47 Forecasted growth rate 13.59 % 11.30 % 7.23 % Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties.
For this question, use the American Eagle Outfitters 2016 10Ks and 2017 Q1 10Q from the previous questions. Your Managing Director asks you to include valuations based on Comparable Forward PE multiples given that peer capital structures have been relatively similar. She asks you to assume a 14x PE multiple on forward diluted EPS, and a 10% growth rate over LTM diluted EPS to calculate forward EPS, which is being assumed by industry analysts. Using the aforementioned assumptions for Comparable Transactions’ PE multiples, what is the implied AEO share price based on the latest data provided to you from its Corporate filings as of June 2017? 15.12 16.63 16.79 17.86

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