Tanrun Inc. is expected to pay an annual dividend of $0.45 per share in one year. Analysts expect the firm's dividends to grow by 4% forever. Its stock price is $38.8 and its beta is 1. The risk-free rate is 2% and the expected market risk premium is 4.5%.   What is the best guess for the cost of equity? Recall that both Dividend Growth Model and CAPM can be used to find cost of equity. Here assume the best guess is the simple average of the two.

The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 6% per year. Callahan's common stock currently sells for $22 per share; its last dividend was $2.00; and it will pay a $2.12 dividend at the end of the current year. 1. Using the DCF approach, what is its cost of common equity? 2. If the firm's beta is 1.2, the risk-free rate is 6%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. 3. If the firm's bonds earn a return of 11%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations.

Use the following forecasted financials: (Certain cells were left intentionally blank by asker)  You may need to use the CAPM model. Assume beta equals 1.09, the risk-free rate is 1.62%, and the market risk premium is 4.72%.   d) Calculate the terminal value and the present value of the terminal value. Assume a long-term growth rate of 3%.         e)  Calculate Sherwin Williams value per share. The company has 263.3 million shares outstanding.

Consider the following security:                       Brous Metalworks         Earnings Per Share, Time = 0 $2.00          Dividend Payout Rate 0.250         Return on Equity 0.150         Market Capitalization Rate 0.125                     Required:           Using the information in the tables above, please calculate the sustainable growth rate, dividends per share, and intrinsic value per share. Then solve for the present value of growth opportunities.             (Use cells A5 to B8 from the given information to complete this question.)                       Brous Metalworks         Sustainable Growth Rate           Dividends per share (Next Year)           Intrinsic Value           No-Growth Value Per Share           Present Value of Growth Opportunities (PVGO)

Assume the risk-free rate is 4% and the beta for a particular firm is 2, current firm share price is $35 and the market risk premium is 8%. A.Given the risk level, what is the one-year required rate of return (we will call this k)? B.If next year’s expected dividend is $3, use k from part A to solve for the expected next year’s price.

You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: a. What was XYZ's average historical return? b. Compute the market's and XYZ's excess returns for each year. Estimate XYZ's beta. c. Estimate XYZ's historical alpha. d. Suppose the current risk-free rate is 3%, and you expect the market's return to be 9%. Use the CAPM to estimate an expected return for XYZ Corp.'s stock. e. Would you base your estimate of XYZ's equity cost of capital on your answer in part (a) or in part (d)? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2007 2008 Risk-free Return 2% 1% Print Market Return 5% - 39% Done XYZ Return 11% - 46% X

Mackenzie Company has a price of $31 and will issue a dividend of $2.00 next year. It has a beta of 1.5, the risk-free rate is 5.4%, and the market risk premium is estimated to be 4.8%. a. Estimate the equity cost of capital for Mackenzie. b. Under the CDGM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)?

Franklin Corporation is expected to pay a dividend of $1.24 per share at the end of the year (D1 = $1.24). The stock sells for $32.40 per share, and its required rate of return is 7.2%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.

Blue is currently selling for $26 per share. Its next dividend​ (in one​ year) is forecasted to be   $1. Immediately after the dividend is​ paid, you expect the price to be   $33. a. What is its expected dividend​ yield? b. What is its expected capital gain​ rate? c. What is the equity​ investors' expected​ return?       Question content area bottom Part 1 a. Dividend​ yield: enter your response here​%. ​ (Round to two decimal​ places.)   b. Capital gain​ rate: enter your response here​%.   ​(Round to two decimal​ places.)   c. Expected​ Return: enter your response here​%. ​(Round to two decimal​ places.)

Earnings this year will be $6 per share, and investors expect a rate of return of 8% on stocks facing the same risks as Web Cites. a. What is the sustainable growth rate? b. What is the stock price? c. What is the present value of growth opportunities (PVGO)? d. What is the P/E ratio? e. What would the price and P/E ratio be if the firm paid out all earnings as dividends? (Do not round intermediate calculations. Round your answers to 2 decimal places.) > Answer is complete but not entirely correct. a. Sustainable growth rate 2.00 % b. Stock price $ 91.84 x C. PVGO $ (13.78) X d. P/E ratio 10.20 x e. Price $ 75.00 P/E ratio 12.50