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- JRN Enterprises just announced that it plans to cut its next-year dividend, D₁, from $2.50 to $1.10 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 3% per year and JRN's stock was trading at $25.00 per share. With the new expansion, JRN's dividends are expected to grow at 6% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to: OA. $11.00 B. $25.00 OC. $35.71 O D. $15.71Stewart Industries expects to pay a $3.00 per share dividend on its common stock at the end of the year (i.e. D1 = $3.00). The dividend is expected to grow 25 percent a year until t = 3, after which time the dividend is expected to grow at a constant rate of 5 percent a year (i.e. D3 = $4.6875 and D4 = $4.9219). The stock’s beta is 1.2, the risk-free rate of interest is 6 percent, and the market risk premium (i.e., rm –rrf) is 5 percent. What is the company’s current stock price?JRN Enterprises just announced that it plans to cut its next-year dividend,D1, from $2.25 to $1.20 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $24.50 per share. With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to?
- Cooperton Mining just announced it will cut its dividend from $3.88 to $2.59 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends wereCX Enterprises has the following expected dividends: $1.03in one year, $1.18 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4.4% per yearZoom Enterprises expects that one year from now it will pay a total dividend of $5.0 million and repurchase $5.0 millionworth of shares. It plans to spend $10.0 million on dividendsZoom Enterprises expects that one year from now it will pay a total dividend of S5.0 million and repurchase $5.0 million worth of shares. It plans to spend $10.0 million ondividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is 13.0% and it has 5.0 million shares outstanding, what is its shareprice today? The price per share is S. (Round to the…Firm B has a net income of $2 million and has 1 million shares of common stocks outstanding. Firm B’s shares currently trade at $32 per share. The management is planning to use available cash to purchase 20% of Firm B’s shares in the open market. The repurchase is expected to have no effect on either net income or Firm B’s P/E ratio. What will be the share price of Firm B following the share repurchase? After 5 to 1 share split, Firm S paid a dividend of $0.75 per share, which represents 9 percent increase over last year’s pre-split dividend. What was last year’s dividend per share?AFW Industries has 180 million shares outstanding and expects earnings at the end of this year of $735 million. AFW plans to pay out 56% of its earnings in total, paying 37% as a dividend and using 19% to repurchase shares. If AFW's earnings are expected to grow by 8.9% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 12.6%. The price per share will be $ (Round to the nearest cent.)
- Alpha Moose Transporters has a current stock price of $33.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company's earnings and dividends' growth rate are expected to grow at the constant rate of 8.70% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be White Lion Homebuilders Co.'s addition to earnings for this year is expected to be $420,000. Its target capital structure consists of 35% debt, 5% preferred, and 60% equity. Determine White Lion Homebuilders's retained earnings breakpoint $840,000 $630,000 $875,000 $700,000Red, Inc., Yellow Corp., and BlueCompany each will pay a dividend of $2.35 next year. The growth rate in dividendsfor all three companies is 5 percent. The required return for each company’s stockis 8 percent, 11 percent, and 14 percent, respectively. What is the stock price foreach company? What do you conclude about the relationship between the requiredreturn and the stock price?AFW Industries has 196 million shares outstanding and expects earnings at the end of next year of $672 million. AFW plans to pay out 60% of its earnings in total, paying 34% as a dividend and using 26% to repurchase shares. If AFW's earnings are expected to grow by 8.9% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 11.1%. The price per share will be $____ (Round to the nearest cent.)
- You expect X-Co will pay a dividend of $76 million and repurchase $100 million of its common shares next year (Year 1) with both expected to grow 8% in Year 2 and 6% in Year 3. If you expect the company to be sold for $12 billion at the end of Year 3, and you have calculated the cost of equity to be 8.4%, what do you estimate the true value of the company’s net worth to be now? (First draw a timeline. Assume all cash flows are at the end of the year.)FedEx Corporation (FDX) has a current share price of $157.56 and is expected to have earnings per share (EPS) next year of $11.04 per share. Analysts expect that FedEx's closest competitor, United Parcel Service, Inc. (UPS), will have earnings next year of $8.33 per share. FedEx's cost of capital is 11%. What is your current estimate of the value of one share of UPS stock using the method of comparables? OA. $118.88 OB. $208.82 OC. $75.73 OD. $14.27 OE. $154.85 OF. None of the above is withing $0.35 of the value of one share of UPS stock. CDEF Company's current share price is $17 and it is expected to pay a $1.55 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 2.7% per year. What is an estimate of DEF Company's cost of equity? DEF Company also has preferred stock outstanding that pays a $2.45 per share fixed dividend. If this stock is currently priced at $25.6 per share, what is DEF Company's cost of preferred stock?