Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our stock isworth 290 EUR today. We authorized payment of 30 EUR dividend for this fiscal year, and it was already paidyesterday.. Sales are up, and we are expecting the company to continue to grow at its historical rate of 1.0% perannum. Our accountants report that the return on equity of our company is 30.0%.1. What returns are investors expecting for equities with a similar risk profile as ours?2. Calculate the dividend yield Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our stock isworth 290 EUR today. We authorized payment of 30 EUR dividend for this fiscal year, and it was already paidyesterday.. Sales are up, and we are expecting the company to continue to grow at its historical rate of 1.0% perannum. Our accountants report that the return on equity of our company is 30.0%.1. What returns are investors expecting for equities with a similar risk profile as ours?◆2. Calculate the dividend yield.

Dividend Growth Model: It is valuation model, where fair worth of stock is determined , assuming…

Answered: Our company, Mom and Pop Inc is at the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

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Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our stock is worth 290 EUR today. We authorized payment of 30 EUR dividend for this fiscal year, and it was already paid yesterday.. Sales are up, and we are expecting the company to continue to grow at its historical rate of 1.0% per annum. Our accountants report that the return on equity of our company is 30.0%. 1. What returns are investors expecting for equities with a similar risk profile as ours? 2. Calculate the dividend yield

Transcribed Image Text:Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our stock is worth 290 EUR today. We authorized payment of 30 EUR dividend for this fiscal year, and it was already paid yesterday.. Sales are up, and we are expecting the company to continue to grow at its historical rate of 1.0% per annum. Our accountants report that the return on equity of our company is 30.0%. 1. What returns are investors expecting for equities with a similar risk profile as ours? ◆ 2. Calculate the dividend yield.

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