FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Q 18 Liquidators Inc. currently has a book value of equity per share equal to $10. The company is expected to have ROE of 44% and reinvest 100% of its earnings every year for the next 2 years. According to analysts'
Options -
$14.40
$10
$6.94
$12
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- ff1arrow_forwardQUESTION 7 Manchester plc is expected to pay annual dividends of £1.50, £1.75 and £2.00 per share at the end of each of the next three years (i.e., from t-1 to t=3). After year 3, annual dividends are expected to grow at a rate of 2% forever. Assuming that shareholders of Manchester plc. require a rate of return equal to 5% per year, what is the fair value for the share of Manchester plc.? O £95.52 £64.70 O £48.37 O £63.48arrow_forwardff1arrow_forward
- Melia Corporation Current share price $4.65 Current dividend $0.10 Required return on equity 6% Net Income $2.7 Mln Total shareholders’ equity $19 Mln Beta 1.15 Ten year Melia bond yield 3.8% Melia’s expected growth rate for the next five years is 18%, dropping to a long term sustainable rate into perpetuity of 4% For Melia, use a form of the dividend discount model to determine the fair value of the share price. Is Melia under or over-valued compared to the marketarrow_forwardQ 20) Advertise-In-Print Ltd. currently has an earnings growth rate of -15%, i.e., their earnings are declining at the rate of 15% per year. This rate of earnings decline is expected to stay constant henceforth. Advertise-In-Print Ltd.'s next year's dividend per share is expected to be equal to $1.00 and their cost of equity is 10%. What is the intrinsic value of one share of stock in Advertise-In-Print Ltd. equal to? Options - $4 $10 $6.67 $20arrow_forwardChapter 7 Homework Problems t han KE CK Enterprises has the folowing expected dividends $1 06 in one year, $1 18 in two years, and $1.31 in three years. After that, is dividends are expected to grow at 43% per year forever (so that year s dividend will be 4.3% more than $1 31 and so on) CXS eaty cost of capital is 12 2%, what is the current price of its stock?arrow_forward
- at 12% •ssume today is December 31, 2019 Imagine works Inc just paid a dividend of $1.40 per shure at the end of 2019. The dividend is expected to Grow per year for 3 years, after which time it is expected to grow at a constant rate of 3,5%. amually. The company's cost of equity (rs) is 9,5%. Using the dividend Growth model Callowing for nunconstant growth), What should be the Price of the of the company's stock today (December 31, 2019)? per share Aarrow_forwardSuppose a company will be in business for only the next 10 years and pays an annual dividend of $1.75 for those ten years. What is the present value of a share of stock for this company if we want a 9% return on the stock? O A. $19.08 O B. $15.97 OC. $26.59 O D. $11.23arrow_forwardQ14: Suppose a company is expected to pay a dividend of $2.30 per share next year. Assuming the dividend growth rate is 5% a year and the market requires a return of 12%, how much should the stock be selling for?arrow_forward
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