Q: a. Assuming the current market price of the stock reflects its intrinsic value as computed using the…
A: Intrinsic value of a share is the value which an investor is going to get by holding the shares. If…
Q: WICB’s stock’s intrinsic value is $48.40, the required rate of return is 12.5 percent and the…
A: Calculate WICB's recent dividend: Assumption: Dividend growth rate is in perpetuity Formula to…
Q: he current stock pric
A: Given information : Dividend to be paid out = $5.90 Current price of stock = $40.90
Q: If the interest rate is approximately equal to the growth rate of dividends, the price of a stock…
A: Formula for stock price calculation using Dividend discount model: =D1 / (Ke- growth rate)
Q: The blue stair-step line depicts the value of future stock dividends. The orange stair-step line…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Stock A has a capital gains yield of 10% and a dividend yield of 4%. Stock B has a capital gains…
A: The return that a security must generate to satisfy the expectations of investor is called required…
Q: Look at the illustrative new-issue prospectus. a. Is this issue a primary offering, a secondary…
A: In an IPO there are majorly 2 types of costs ie direct and indirect Direct costs are usually…
Q: (TCO D) A stock pays an annual dividend of $2.50 and that dividend is not expected to change.…
A: In the given problem we required to calculate the value of Stock with following details: Dividend…
Q: You are evaluating two stocks and trying to decide if they are underv You are given the following…
A: Alpha of stock shows that how is the performance of stock based on the risk involved in the stock so…
Q: A stock has a Beta of 1.0. The risk-free rate is 4.7%, and the Market Risk Premium is estimated at…
A: Stock beta =1.0 Risk. Free rate =4.70% Market risk premium =7.40% Market risk premium = market…
Q: The dividend yield (i.e. D1/P0) is a good measure of the expected return on a common stock under…
A: The percentage dividend yield is a financial proportion (dividend/price), indicating how often a…
Q: e. Use equation below to calculate the present value of this stock. Po= Do(1+e) - D Assume that g -…
A: As per the dividend growth model An investor in equity shares buys the shares at fixed fair price.…
Q: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per…
A: Part a: We can determine the values by using the steps below:
Q: Find the equilibrium rate of return on this stock using the APT. The T-bill rate is 4%. (Do not…
A: Expected Return refers to minimum yield that an investor wants from an investment made. It is…
Q: .Consider stock XYZ. If the current book value is 100, the current earnings per share is 10, the…
A: Given, Current Book Value = 100 Current Earnings per share = 10 Growth Rate =3% Discount Rate = 13%…
Q: 1. If the required rate of return is 5 percent and the stock pays a fixed S5 dividend, its value is…
A: Value of stock = Dividend / Required Rate of return Value of stock = 5 / 5% Value of stock =100…
Q: 2
A: The return that is expected to be earned from the investment in equity and which acts as a cost to…
Q: You are evaluating a stock that just paid a dividend of S4.6. Dividends are expected to grow at a…
A: This Question is based on dividend discount model. We are required to calculate the value of stock…
Q: The constant growth valuation formula has dividends in the numerator. Dividends are divided by the…
A: The statement “The capital gains yield on a stock that the investor already owns has a direct…
Q: Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in…
A: The following information given in the question: 1. Price of both stock X and Y are same $25 2.…
Q: Today, a firm has a stock price of $14.26 and an EPS of $1.15. Its close competitor has an EPS of…
A: The method of comparable is often used in finance for the purpose of valuation. This method is also…
Q: Consider the following for a firm. Its stock price (P0) is at $50, its payout ratio (POR) is 0.4,…
A: The share price is the current market price of the share. It is the price of the share at any…
Q: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2…
A: Share price: It is the current market value of the shares at which buyers and sellers trade. If the…
Q: What is the expected rate of return for this non-constant growth stock? You have evaluated this…
A: A rate of return is the net profit or loss on an investment over a given period of time represented…
Q: What will be the nominal rate of return on perpetual preferred stock with a $160 par value, a stated…
A: In the given question we need to compute the nominal rate of return on perpetual preferred stock.…
Q: What is the value of a stock if: D0 = $5.00 k = 12% g = 6%
A: As per our policy, we only answer 3 subparts when many are presented. Information Provided:…
Q: 1. The market value of the stocks of Shine Corporation at the beginning of year 1 is $120 per share,…
A: Holding period return (HPR) refers to the total return generated by an asset or an investment over…
Q: What is the current stock price?
A: Information Provided: Dividend Paid = $1.50 Required rate of return = 8.90% Constant growth rate =…
Q: and B have the following data. Assuming the stock market is efficient and the stocks are in…
A: The constant growth model is used extensively to determine the price of stock and from the price of…
Q: The following three stocks are available in the market: E(R) β Stock A 10.9 % 1.18…
A: Given the following information Expected return of Stock A: 10.9%Beta of Stock A: 1.18 Expected…
Q: If D1 = $1.25, g (which is constant) = 4.7%, and P0 = $42, what is the stock's expected dividend…
A: given, D1= $1.25 g= 4.7% P0 = $42
Q: A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 9.0%, and the…
A: The dividend discount model will be used here. As per the dividend discount model the current value…
Q: What is the required rate of return on a preferred stock with a $50 par value, a stated annual…
A: Preferred stock is defined as the stock that generally pays the dividend at predetermined fixed…
Q: Analogue Technology has preferred stock outstanding that pays a $9 annua dividend. It has a price of…
A: The required rate of return is the return that the investor expects for investing in the asset. When…
Q: What would be impact on price of stock if the required rate of return moves to, 12.5 percent, 13.5…
A: There is an inverse relationship between the required rate of return and the price of stock…
Q: Stock A has a capital gains yield of 6.5% and a dividend yield of 1.5%. Stock B has a capital gains…
A: Given information is regarding two stocks A and B. Capital gains of A = 6.5% Dividend yield of A=…
Q: Assume that you are a consultant to Broske Inc., and you have been provided with the following data:…
A: Given: D1 = Expected dividend = $0.67 P0= Current price g = Growth rate = 8% Flotation cost = 5%
Q: A stock justpaid a dividend of $0.8. The required rate of return is 10.6%, and the constantgrowth…
A: price of stock =dividend×1+gr-g
Q: Express Steel Corporation wishes to calculate its cost of common stock equity, by using the capital…
A: Since you have asked multiple questions, we will solve one question for you. If you want any…
Q: Ran Company wants to determine its cost of common stock equity using the CAPM. The company's…
A: Solution:- Capital Asset Pricing Model (CAPM) is a model to determine cost of equity of a company.…
Q: onsider the following for a firm. Its stock price (P0) is at $50, its payout ratio (POR) is 0.4, its…
A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…
Q: a stock is selling for 9.5 and pays dividend of 0.1 cents , growth rate is 0.035 what is the…
A: The formula used is shown:
Q: Assume an investor uses the constant-growth DVM to value a stock. Listed are various situations that…
A: The constant growth model seems to be a method of evaluating stocks. It presupposes that a firm's…
Q: Which one of the following statements is correct? If NPV is positive, IRR will be less than…
A: Bartleby Honor Code suggests when multiple questions are asked, the expert should solve only the…
Just need the correct answer of the following questions no detail explanation:
-
The current price is 40$ and the dividend paid is 10$ what will be the divided yield
a. 0.04
b. 25
c. 4
d. 0.25
-
The paid dividend is 20$ and the current price is 50$ what will be dividend yield?
a. 30
b. 40
c. 70
d. 0.4
-
Which of the following is another name for the required return on a stock?
a. discount rate
b. value
c. retention ratio
d. dividend payout
-
-
Step by step
Solved in 2 steps
- please respond to both questions. Stocks A and B have a dividend of $3. Stock A’s dividends are expected to grow at 3% forever. Dividends for Stock Dividends for Stock B are expected to remain at $3 forever. All else equal, which stock should have a higher price? A B A=B Not sure Company Dividend Yield Required Return Price Market Capitalization A 7% 10% $100 $1,000,000 B 7% 11% $10 $10,000,000 Which stock has the higher capital gain's yield? A B A=B Not sureStocks A and B have the following data. The market risk premium is 6.0% and the risk-free rate is 6.4%. Which of the following statements is CORRECT? (Hint: Dividend yield (D1/P0) is the difference between Re and g. Calculate Re first by using CAPM.) A B Beta 1.10 0.90 Constant growth rate 7.00% 7.00% Stock A must have a higher stock price than Stock B. Stock A must have a higher dividend yield than Stock B. Stock B’s dividend yield equals its expected dividend growth rate. Stock B must have the higher required return. Stock B could have the higher expected return.Assume a stock pays a perpetual dividend of 2 dollars, has a required rate of return of 9%, a relative bid ask spread of 0.5% and a relative trading frequency of 0.1 (μ=0.1). According to the Amihud and Mendelson (1986) model, the price of the stock would be: a.$22.10 b. $2.00 c. $9.02 d. Other e. $14.50 Give typing answer with explanation and conclusion
- Using the equity asset valuation model (CAPM) equation, determine the required return for the shares of the following companies, if the market return is 7.50% (Rm = 7.50%) and the risk-free asset return is 1.25% (RF = 1.25%). You must show all counts. Stock Beta SKT 0.65 COST 0.90 SU 1.42 AMZN 1.57 V 0.94Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67 P0 = $27.50; g = 8.00% (constant). Float on new issues is 5% of market price. What is the cost of issuing common stock?Give typing answer with explanation and conclusion to all parts A stock just paid a dividend of $1.01. The dividend is expected to grow at 22.50% for two years and then grow at 3.72% thereafter. The required return on the stock is 14.48%. What is the value of the stock? The risk-free rate is 2.77% and the market risk premium is 6.56%. A stock with a β of 1.45 will have an expected return of ____%. The risk-free rate is 3.58% and the expected return on the market 10.83%. A stock with a β of 1.77 will have an expected return of ____%. A stock has an expected return of 14.00%. The risk-free rate is 3.13% and the market risk premium is 9.76%. What is the β of the stock?
- Give typing answer with explanation and conclusion The market price of a stock is $48.96 and it just paid $5.06 dividend. The dividend is expected to grow at 3.26% forever. What is the required rate of return for the stock?The dividend yield (i.e. D1/P0) is a good measure of the expected return on a common stock under which of the following circumstances? g = 0 g > 0 g < 0 g is expected to remain constant over time under no circumstancesStocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? X Y Price $25 $25 Expected dividend yield 5% 3% Required return 12% 10% a. Stock X pays a higher dividend per share than Stock Y. b. One year from now, Stock X should have the higher price. c. Stock Y pays a higher dividend per share than Stock X. d. Stock Y has the higher expected capital gains yield. e. Stock Y has a lower expected growth rate than Stock X.
- The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. V=D0(1+g) / k-g What is the value of a stock if:D0 = $2.50k = 10%g = 6% $ What is the value of this stock if the dividend is increased to $4.40 and the other variables remain constant? $ What is the value of this stock if the required return declines to 7.5 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $3.20, the growth rate declines to 4 percent, and the required return remains 10 percent? $Assume that you are using the Capital Asset Pricing Model (CAPM) to find the expected return for a share of common stock. Your research shows the following: Beta = βi = 1.54 Risk free rate = Rf = 2.5% per year Market return = E(RM) = 6.5% per year Based on this information, answer the following: A. Based on the beta, how does the stock's risk compare to the market overall? On what do you base your answer? B. Based on the beta, how would you expect the stock's returns to react to a decrease in returns in the market overall? Why? C. According to the CAPM and the information given above, what is the expected return E(Ri) for this stock? D. If the required rate of return on this stock were 7% per year, would you invest? Why or why not?Assuming yourself to be Anna, narrate what you would have read in the file. Your narrative should include answers to the following: Note: 1 Retention ratio = 1 – Dividend payout ratio a) If after changing the dividend policy to a 70% payout, Chatterbox grows at a 3% rate, what would be the implied ACTUAL return on equity and stock price? Does the stock price rise or fall? Why?