Beta Co. currently has 1 million shares outstanding each selling for $50. It is contemplating a 2-for-1 stock split. The firm believes that its total market value would remain constant after the split. 1. What is the Beta's expected price after the split?* 3 points O a. $75 per share O b. $100 per share O c. $25 per share d. $30 per share O e. None of the above

Beta Co. currently has 1 million shares outstanding each selling for $50. It is contemplating a 2-for-1 stock split. The firm believes that its total market value would remain constant after the split. 1. What is the Beta's expected price after the split?* 3 points O a. $75 per share O b. $100 per share O c. $25 per share d. $30 per share O e. None of the above

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

See similar textbooks

Similar questions

Please Provide correct answer with option
An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $7 billion, pays a relatively high dividend with little increase in earnings, and has a P /E ratio of 11. Stock Y has a market capitalization of $62 billion but does not currentlypay a dividend. StockY has a P /E ratio of 39. Stock Z, a housing industry company, has a market capitalization of $800 million and a P /E of 18.a.Classify these stocks according to their market capitalizations.b.Which of the three would you classify as a growth stock? Why?c.Which stock would be most appropriate for an aggressive investor?d.Which stock would be most appropriate for someone seeking a combination of safety and earnings?
Give typing answer with explanation and conclusion A share of common stock is paying $3.50 per share, but the corporation only pays 40% of its earnings as cash dividends. The anticipated growth of this stock is 8%. Find the value of this stock if an investor wants a yield of 10%. If the stock is selling for $45, what is the expected yield?
You believe that Rose, Incorporated, stock is going to fall and you've decided to sell 900 shares short. If the current share price is $52, construct the equity account balance sheet for this trade. Assume the initial margin is 65 percent. Note: Do not round intermediate calculations. Input all amounts as positive values. Assets Proceeds from sale Initial margin deposit Total Liabilities and account equity Short position Account equity Total
Caspian Water needs to raise $59.00 million by issuing additional shares of stock. If the market estimates Caspian Water will pay a dividend of $2.12 next year (D1 2.12), which will grow at 3.99% forever and the cost of equity to be 12.82%then how many shares of stock must the firm sell? 1 ) None of the answers in this list is within 100 shares of the correct answer 2) 312,890 3) 2,457,406 4 ) 4,128,970 5 ) 915,939 6 ) 2.975,934
Bailey's has a preferred share issue outstanding with a current price of $26.57 per share and a par value of $25. The firm is expected to pay a dividend of $1.86 per share a year from today. What would be the cost of issuing new shares of preferred equity? (Round your final answer to the nearest percentage.) O 7.44% O 6.50% O 7.00% O 8.00%
1. A share has just paid a dividend of OMR2.00. The dividend is expected to grow constantly at 20% and the required return on similar shares is 8%. What price is the share? A. OMR20.00 B. Approximately OMR16.67 C. OMR18.00 D. It cannot be calculated
Q: Corn, Inc., has an odd dividend policy. The company has just paid a dividend of $6 per share and has announced that it will increase the dividend by $2 per share for each of the next four years, and then never pay another dividend. suppose you require an 11 percent return on thecompany’s stock.Required:a) how much will you pay for a share today?b) Is the value of this stock dependent upon how long you plan to hold it? would this affect the value of the stock today?c) What happens if a company has a constant growth g that exceeds its cost of capital ks?Will many stocks have expected g> ks in the short run? In the long run (that is, forever)?
Need the answer of the following question
YNWA Limited has asked you to calculate the return on its ordinary shares to help in its calculation of its weighted average cost of capital (WACC). YNWA has 2,000,000 ordinary shares on issue that have a beta of 1.79. The last dividend was $6.66. If the risk-free rate is 1.73% and the return on the market is 5.63%. What is the required return on one of YNWA's ordinary shares? Record your answer to the nearest four decimal places (e.g., if your answer is 3.40%, then report 0.0340).
Labrador technologies Inc. plans to become public soon. The current owners would like to know the value of each share of common equity so they price their shares correctly for potential investors. The WACC for this firm is 10.46% and there are 63,314 common shares outstanding. The firm has outstanding debt with a market value of $2,840,088 and has no preferred equity. Use the DCF valuation model based on the expected FCFs shown below; year 1 represents one year from today and so on. The company expects to grow at a 2.8% rate after Year 5. Rounding to the nearest penny, what is the value of each share of common stock? Period Free Cash Flow Year 1 $1,004,648 Year 2 $1,442,144 Year 3 $1,311,927 Year 4 $2,319,814 Year 5 $2,598,958
Malbar Gold has a preferred share issue outstanding with a current price of OMR 20.50 . The firm is expected to pay a dividend of OMR 2,50 per share a year from today . If the floatation cost is 3 % what is the firm's cost of preferred equity ? Select one A. None of these B. 17.42 C. 10.44 D. 13.50

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS