Stormy Weather has no attractive investment opportunities. Its return on equity equals the discount rate, which is 5%. Its expected earnings this year are $2 per share. Complete the following table. (Leave no cells blank. Enter a zero, wherever necessary. Do not round intermediate calculations. Round growth rate to two decimal places.) Plowback Ratio Growth Stock PE Ratio 0 0% 40.00 20.00 .20 1.00% .70 3.50
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Stormy Weather has no attractive investment opportunities. Its
| Plowback Ratio | Growth | Stock | PE Ratio |
| 0 | 0% | 40.00 | 20.00 |
| .20 | 1.00% | ||
| .70 | 3.50 |
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- Stormy Weather has no attractive investment opportunities. Its return on equity equals the discount rate, which is 5%. Its expected earnings this year are $2 per share. Complete the following table. (Leave no cells blank. Enter a zero, wherever necessary. Do not round intermediate calculations. Round growth rate to two decimal places.) Plowback Ratio Growth Rate Stock Price P/E Ratio a. 0 % b. 0.40 % c. 0.60 %Tinsley, Incorporated, wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .4. The profit margin is 5.6 percent, and the ratio of total assets to sales is constant at 1.59. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the maximum growth rate possible? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Levine, Inc., has an ROA of 7.7 percent and a payout ratio of 27 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
- Tinsley, Incorporated, wishes to maintain a growth rate of 17 percent per year and a debt-equity ratio of 1.1. The profit margin is 4.4 percent, and total asset turnover is constant at 1.04. What is the dividend payout ratio? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the maximum sustainable growth rate for this company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.The common stock of Manchester & Moore is expected to earn 14.8 percent in a recession, 8 percent in a normal economy, and lose 5.8 percent in a booming economy. The probability of a boom is 12 percent while the probability of a recession is 6 percent. What is the expected rate of return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Sandhill, Inc., is a consumer products firm that is growing at a constant rate of 4.0 percent. The firm’s last dividend, which was just paid, was $3.36. If the required rate of return is 20.0 percent, what is the market value of this stock if dividends grow at the same rate as the firm? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.20.)
- Stormy Weather has no attractive investment opportunities. Its return on equity equals the discount rate, which is 5%. Its expected earnings this year are $4 per share. Complete the following table. Plow Back Ratio Growth Rate Stock Price P/E Ratio a. 0 b. .20 c. .80Stormy Weather has no attractive investment opportunities. It's return on equity equals the discount rate, which is 10%. It's expected earnings this year are $3 per share. Complete the following table.The market consensus is that Analog Electronic Corporation has an ROE = 10%, a beta of 1.35, and plans to maintain indefinitely its traditional plowback ratio of 1/4. This year’s earnings were $2.80 per share. The annual dividend was just paid. The consensus estimate of the coming year’s market return is 12%, and T-bills currently offer a 6% return. a. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Calculate the present value of growth opportunities. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 3/4. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
- Nyeil, Inc., is a consumer products firm that is growing at a constant rate of 7.5 percent. The firm’s last dividend was $3.36. If the required rate of return is 20.0 percent, what is the market value of this stock if dividends grow at the same rate as the firm? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.25.) Market value $ _____Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year. a. If r = 10% and DIV1 = $6, what is the value of a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If r = 10% and DIV1 = $6, What price do you forecast for the stock next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. If r = 10% and DIV1 = $6, What rate of return should you expect if you buy the stock today and sell it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.).WilliamsF1 just paid a $2.20 dividend but predicts it will be in trouble over the next 5 years with an RoE of 2.5%, and a reinvestment rate of 40%. Analysts predict this bad growth period will linearly increase over the 5 year period to an improved level, with RoE of 24.5% and a reinvestment rate of 40%. If the cost of equity for WilliamsF1 is 13.34%, what is the implied intrinsic value of equity?