Answered: 1.Firm currently pays a dividend of 4…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 16MC

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1.Firm currently pays a dividend of 4 EURO per share. That dividend is expected to grow a a 5% rate indefinitely. Stocks with similar risk provide a 10% expected return. Estimate the intrinsic value of the firm's stock based on the assumption that the stock will be sold after 2 year's from now at its expected intrinsic value. 2. The bulldog company paid 1.5 of dividends this year. If it's dividends are expected to grow at a rate of 3 per year, what is the expected dividend per share for bulldog 5 years from today? 3. The market price of a share of XY Limited is 600 and the earnings per share is 10. Compute for the PER ( Price Earnings Ratio). 4. Given: cash flow of the yr. 1=100,000 and k=12%,solve for the value. 5. Given: D1=10% D2=12% and k 6%,solve for the value.

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