Skysong Inc has recently reported steadily increase income. The company reported income of $20,720 in 2022, $27,030 in 2023, and $31,580 in 2024. A number of market analysts have recommended that investors buy the stock becuase they expect the steady growth in income to continue. Skysong is approaching the end of its fiscal year in 2025, and it again appears to be a good year. However, it has not yet recorded warranty expense. Based on prior experience, this years warranty expense should be around $4,540 but some managers have approached the controller to suggest a larger, more conservative warranty expense should be recorded this year. Income before warranty expense is $42,660. Specifically, by recording a $6,980 warranty accrual this year. Skysong could report an increase for this year and still be in a position to cover its warranty costs in future years.

eBook The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 7.2 million shares outstanding, is now (1/1/22) selling for $79.00 per share. The expected dividend at the end of the current year (12/31/22) is 60% of the 2021 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.) EPS Year 2012 $5.73 2013 6.19 2014 6.68 2015 7.22 2016 7.80 The current interest rate on new debt is 12%; Foust's marginal tax rate is 25%; and its target capital structure is 55% debt and 45% equity. a. Calculate Foust's after-tax cost of debt. Round your answer to two decimal places. % % EPS $3.90 4.21 4.55 4.91 5.31 Calculate Foust's cost of common equity. Calculate the cost of equity as rs = D₁/Po + g. Do not round intermediate calculations. Round your answer to two decimal places. Year 2017 2018 2019 2020 2021 % b. Find Foust's WACC. Do not…

Integrative Risk and valuation Giant Enterprises' stock has a required return of 14.8%. The company, which plans to pay a dividend of $2.93 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: a. If the risk-free rate is 5%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. a. If the risk-free rate is 5%, the risk premium on Giant's stock is%. (Round to one decimal place.) C

On December 31,2019, Microsoft paid an annual dividend per share of $5. Today is January 1st, 2020. The dividend is expected to grow by 2% per year for the next four years and by 1% afterwards in perpetuity. The risk free rate is 6% and the market risk premium is 6%. Microsoft has a beta of 1.3 what should be the stock price of Microsoft on January 1st 2020 based on these dividend forecasts?

Integrative-Risk and valuation Giant Enterprises' stock has a required return of 14.2%. The company, which plans to pay a dividend of $1.84 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: E. a. If the risk-free rate is 6%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. a. If the risk-free rate is 6%, the risk premium on Giant's stock is %. (Round to one decimal place.) b. Using the constant-growth model, the value of Giant's stock is $ . (Round to the nearest cent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. (Select from the…

Common stock value: Constant growth Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From 2015 through 2019, Seagate paid the following per-share dividends: Year Dividend per share 2019 2018 2017 2016 2015 Assume that the historical annual growth rate of Seagate dividends is an accurate estimate of the future constant annual dividend growth rate. Use a 21% required rate of return to find the value of Seagate's stock immediately after it paid its 2019 dividend of $2.49. $2.49 2.26 1.87 1.23 1.49 The value of Seagate's stock is $. (Round to the nearest cent.) C

Suppose a firm has had the following historic sales figures. Year: 2016 Sales $1,420,000 2017 $1,720,000 Next year's sales 2018 2019 2020 $1,600,000 $2,010,000 $1,770,000 What would be the forecast for next year's sales using FORECAST.ETS to estimate a trend? Note: Round your answer to the nearest whole dollar. 27