Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Consider the following information which relates to a given company: Item 2019 Value $6.87...

Consider the following information which relates to a given company: Item 2019 Value $6.87 $37.44 Earnings Per Share Price Per Share (Common Stock) Book Value (Common Stock Equity) Total Common Stock

Consider the following information which relates to a given company: Item 2019 Value $6.87 $37.44 Earnings Per Share Price Per Share (Common Stock) Book Value (Common Stock Equity) Total Common Stock Outstanding Dividend Per Share $62.96 Million 2.4 Million $4.06 Analysts expect that the company could maintain a constant annual growth rate in dividends per share of 6.52% in the future, or possibly 8.91% for the next 2 years and 6.64% thereafter. In addition, it is expected that the risk of the firm, as measured by the risk premium on its stock, to increase immediately from 8.5% to 12.54%. Currently, the risk-free rate is 5.35%. Required: Assuming no growth in future dividends, and a required return of 16.73%, find the value per share of the firm's stock. $ (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Consider the following information which relates to a given company: Item 2019 Value $6.41 $36.88 Earnings Per Share Price Per Share (Common Stock) Book Value (Common Stock Equity) Total Common Stock Outstanding $60.83 Million 2.1 Million Dividend Per Share $4.7 Analysts expect that the company could maintain a constant annual growth rate in dividends per share of 6.03% in the future, or possibly 8.54% for the next 2 years and 6.44% thereafter. In addition, it is expected that the risk of the firm, as measured by the risk premium on its stock, to increase immediately from 8.76% to 12.98%. Currently, the risk-free rate is 5.65%. Required: Assuming a constant annual 6.03% growth rate in future dividends, find the value per share of the firm's stock. The required return is 16.37%. $ (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Consider the following information which relates to a given company: Item 2019 Value $6.77 $35.96 Earnings Per Share Price Per Share (Common Stock) Book Value (Common Stock Equity) Total Common Stock Outstanding Dividend Per Share $64.53 Million 2.1 Million $5.32 Analysts expect that the company could maintain a constant annual growth rate in dividends per share of 6.49% in the future, or possibly 8.96% for the next 2 years and 6.77% thereafter. In addition, it is expected that the risk of the firm, as measured by the risk premium on its stock, to increase immediately from 8.9% to 12.47%. Currently, the risk-free rate is 5.77%. Required: Assuming a constant annual 8.96% growth rate in dividends per share over the next two years and 6.77% thereafter, find the value per share of the firm's stock. The required return is 16.37%. $ (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Consider the following information which relates to dividends per share (DPS) for a given company: Year DPS 2019 $3.8 2018 $1.70 2017 $1.55 2016 $1.40 2015 $4.2 Today, we are in 2020. Management is in the process of deciding whether to expand or not to expand the firm's branches. Below, is a set of inputs associated with each scenario: Scenario #1 - Do Not Expand: Dividend by the end of 2020 is expected to grow at the historical annual growth rate for the period 2015-2019, which is currently undetermined. This period adds up to four years based upon starting at time zero. Once determined, this rate is expected to continue in the future. Under this scenario, the required return on common stock is 6.3%. Scenario #2 - Expand: Dividend in 2021 is expected to be $2.6 per share, which will grow at an annual rate of 1% for two years (2022 and 2023), and then, the divided would grow at the same unknown rate in the first scenario from 2024 thereafter. Under this scenario, the required return on common stock is 7.5%.

Apr 13 2021 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions