What risks are inherent in using the expected future cash flow method of evaluating projects? In what circumstances would you choose to use a dividend discount model rather than a free cash flow model to value a firm?
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What risks are inherent in using the expected future cash flow method of evaluating projects?
In what circumstances would you choose to use a dividend discount model rather than a
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- Go to Yahoo.com’s financial website and enter Apple, Inc.’s stock symbol, AAPL. Answer the following questions concerning Apple, Inc. At what price did Apple’s stock last trade? What is the 52-week range of Apple’s stock? When was the last time Apple’s stock hit a 52-week high? What is the annual dividend of Apple’s stock? How many current broker recommendations are strong buy, buy, hold, sell, or strong sell? What is the average of the broker recommendations? What is the price-earnings ratio?You have recently been appointed as the investment analyst of Investalot (Pty) Ltd.You are given a table with a list of companies, their stocks and their possible payoffsfor every rand invested as follows:Stock Year 1 (R) Year 2 (R) Year 3 (R)Discovery Ltd 0.8 0.2 0.1Foschini Group Ltd 0.7 0.75 0.55Famous Brands Ltd 0.4 0.15 0.75Required:Using the Minimax regret method choose the stock that will minimise yourmaximum regret.Your broker mailed you your year-end statement. You have P250,000 invested in Happy Chemical, P180,000 tied up in Honey Pie Co., P360,000 in Sweet Candy and P110,000 in MyBabeCorp. The annualized returns for thee stock is 16.5% for Happy; 12% for Honey; 18.5% for Sweet and 15.3% for MyBabe. What is the return of your entire portfolio?
- Adobe is a software company that creates the most innovative creativity apps. Recently their software has become cloud-based. Their price to book ratio is 1.67 and they currently have 1,000,000 shares outstanding. Below you will find an excerpt from their balance sheet for 2019 Calculate the stock price using the price to book ratio. If their stock price is listed on the stock market at $9, should the stockholders sell or hold the stock? Critically discuss the price to book ratio in valuing stocks and provide an alternative method to see if a stock is undervalued or overvalued.On Tuesday 14 September 2021, X Ltd (hypothetical company) opened for trading at a price of $10,756 and closed at a price of $10.82. If you had bought X Ltd shares in the morning and sold them at the end of the day, what is the continuously compounded rate of return you would have earned for the day?The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized return? Hint: Make sure to round all intermediate calculations to at least five decimal places. (Click on the following icon in order to copy its contents into a spreadsheet.) Jan 1 Mar 31 Jun 30 Sep 30 Dec 31 Price 10.09 11.09 10.59 11.19 11.09 Dividend 0.16 0.16 0.16 0.16 Your realized return is%. (Round to one decimal place.)
- Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%. Required:a. What is the margin in Dée’s account when she first purchases the stock? b. If the share price falls to $48 per share by the end of the year, what is the remaining margin in her account? c. If the maintenance margin requirement is 30%, will she receive a margin call?multiple choice Yes No Correct d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%. Required:a. What is the margin in Dée’s account when she first purchases the stock? b. If the share price falls to…Shakee Venture wants to purchase 1,000 shares of an Internet technologystock for $15 a share. She figures that she needs $15,000 plus $90 brokeragecommission to purchase the stock. She currently has $8,000 of liquidity inher money market account.a. What can Shakee borrow on margin in order to make the transaction?b. If the stock jumps to $50 per share within a week, how much will Shakeerealize in profit after paying her broker?c. If the stock dropped to $5 per share, rather than increasing to $50,and the broker put in the margin call, how much must Shakee pay thebroker?d. Based on beginning account balance of $8,000, what is Shakee’s loss?3. Using your iphone, you noticed that IBM was trading at a bargain price, so you decided to purchase 100 shares of stock that is traded on the New York Stock Exchange using your primary stock trading app. What kind of transaction was this? Primary market Secondary market Futures market Private Placement 4. P&G reported the following information for its fiscal year end: On net sales of $51.4 billion, the company earned net income after taxes of $6.5 billion. It had cost of goods sold of $25.1 billion and EBIT of $9.8 billion. Using the information in question 3, calculate the gross margin Using the information in question 3, calculate the operating margin (EBIT margin) Using the information in question 3, calculate the net profit margin
- A friend tells you that you should buy AST Company stock as it is a "great deal." It is January 1, 2020 and the stock is trading at $25 per share. You obtained the financial statements for Leclerc and determined the following: - Book value is $12 per share as of December 31, 2019. - Earnings for 2019 were $4.0 per share. - Earnings are expected to grow at 20% for the next four years. - Dividend payout is 40%. - Residual income is expected to be zero from 2021 onwards. - Cost of equity capital is 15%. Determine, using the residual income method, whether you should buy AST stock as of January 1, 2020.hoose a publicly traded company that interests you and find the price of its stock on your last birthday and yesterday. Calculate the difference in its stock value between yesterday and your last birthday. Calculate how much you would have made or lost if you had purchased 1000 shares of that stock on your last birthday and sold it yesterday. Show all your calculations in your response Company :Amazon stock price today: 129.33 stock price on last DOB 8/26/92: 136.55On 13th November 2019, Marks & Spencer’s CEO buys 100,000 shares of MKS at £185.5. Outline the key steps if you are using the market model to estimate the cumulative abnormal returns CAR (0, 60) event window related to this event.