mon stock value-Zero growth Personal Finance Problem Kelsey Drums, Inc., is a well-established supplier company's class A common stock has paid a dividend of $3.77 per share per year for the last 17 years. Managem d purchased 100 shares of Kelsey class A common 8 years ago at a time when the required rate of return for the urn for the stock is 14.70%. How much total capital gain or loss will Kim have on her shares?
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- Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.84 per share per year for the last 14 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 300 shares of Kelsey class A common 5 years ago at a time when the required rate of return for the stock was 8.3%. She wants to sell her shares today. The current required rate of return for the stock is 5.30%. How much total capital gain or loss will Kim have on her shares? 1. The value of the stock when Kim purchased it was $____per share. (Round to the nearest cent.) 2.The value of the stock if Kim sells her shares today is $_______ per share. (Round to the nearest cent.) 3. The total capital gain (or loss) Kim will have on her shares is $_______. (Round to the nearest dollar. Enter a positive number for a capital gain and a negative…QUESTION 1. a) Newdeal Inc. follows a policy of distributing 45% of its profits and investing the rest in the operations of the company. The average profitability of its assets is 20 % and the current year dividend per face value of 1$ is 30 %. Compute the intrinsic value of a stock of this company for an investor whose minimum required rate of return is 25 %. b) Compute the value of this stock one year later under the same assumptions.Kelsey Drums, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $4.11 per share per year for the last 19 years. Management expects to continue to pay at that amount for the foreseeable future. Kim Arnold purchased 100 shares of Kelsey class A common 8 years ago at a time when the required rate of return for the stock was 7.6%. She wants to sell her shares today. The current required rate of return for the stock is 2.60%. How much total capital gain or loss will Kim have on her shares?
- Assume a Miller-Modigliani (1961) perfect world. Appel Inc. has 8 million shares outstanding, currently priced at $90 each. The company has experienced significant performance gains over previous years, which are expected to continue in the future. Earnings for the most recent period were $200 million. The company is confident that next year earnings will be higher by $100 million than in the previous year. The company plans to continue its development by investing $342 million in capital projects next year. However, the company will need to raise external finance of $50 million. a) What will be the dividend payout ratio of Appel Inc. next year? (b) You are an investor who owns 100 shares of Appel Inc. Calculate your wealth before the dividend payment and after the dividend payment. Assume that the cumulative-dividend stock price is the same as the current price, and Appel Inc. distributes dividends in the amount specified in the previous question. (c) Will the introduction of taxes…The firm of Al Ain and Abu Dhabi purchased a share of LoLo.com common stock exactly one year ago for $45. During the past year the common stock paid an annual dividend of $2.40. Al Ain and Abu Dhabi firm sold the security today for $85. What is the rate of return the firm has earned? Select one: % b. 88.9% c.194,2%Ms. Manners Catering (MMC) has paid a constant $1.50 per share dividend to its common stockholders for the past 25 years. MMC expects to continue this policy for the next two years, and then bealin to increase the dividend at a constant rate equal to 2 percent per year into perpetuity. Investors require a 12 percent rate of return to purchase MMC's common stock What is the market value of MMC's common stock $1473 $1500 $11.54 $1530
- Assist with this question part a and b A year ago, you purchase 300 shares of IXC Technologies, Inc .stock at a price of $9.00 per share.The stock paid an annual dividend of $0.27 per share. Today, you sold all your shares for $ 16.20 per share. a) What is your total dollar return on this investment? b) Calculate dividend yield, capital yield and total rate of return for the year.Net Present Value Analysis Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $13,000 for 200 shares of Malti Company’s common stock. She received a $420 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provided a 14% return and would like some help with the necessary computations. Required: 1. Compute the net present value that Kathy earned on her investment in Malti Company stock Round your answer to the nearest whole dollar. 2. Did the Malti Company stock provide a 14% return?The firm of X Ltd. purchased a share of ABC Ltd. common stock exactly one year ago for Ksh. 45. During the past year the common stock paid an annual dividend of Ksh. 2.40. The firm sold the security today for Ksh. 85. What is the rate of return that the firm has earned?
- 1 Rubenstein Bros. Clothing is expecting to pay an annual dividend per share of $0.80 out of annual earnings per share of $2.50. Currently, Rubenstein Bros. stock is selling for $11.00 per share. Adhering to the company's target capital structure, the firm has $8 million in total invested capital, of which 50% is funded by debt. Assume that the firm's book value of equity equals its market value. In past years, the firm has earned a return on equity (ROE) of 17%, which is expected to continue this year and into the foreseeable future. Retention rate x ROE.) Do not round intermediate calculations. Round your answer to two a. Based on this information, what long-run growth rate can the firm be expected to maintain? (Hint: g decimal places. b. What is the stock's required return? % R LL c. If the firm changed its dividend policy and paid an annual dividend of $1.60 per share, financial analysts would predict that the change in policy will have no effect on the firm's stock price or ROE.…****PLEASE ANSWER PART D AND E ONLY. thanks Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 2.7 million shares that are outstanding. Shareholders required a 10 % rate of return on consolidated stock. A. What is the price of Consolidated stock? B. What is the total market value of its equity? Consolidated now decides to increase next year’s dividends to $20 a share, without changing its investment or borrowing plans. Thereafter, the company will revert to its policy of distributing $10 per year. C. How much new equity capital will the company need to raise to finance the extra dividend payment (enter answer in millions). D. What will be the total present value of dividends paid each year on the new shares that the company will need to issue (answer in millions)? E. what will be the transfer of value from old shareholder to new shareholder (answer in million)?50 years ago your parents purchased a non-dividend paying share in Pinder Ltd for $0.12. Today that share is worth $12.60. Which of the following is closest to the average annual geometric rate of return that your parents have earned on the share? Group of answer choices 5.20% 9.08% 9.75% 8.53%