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?
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WilliamsF1 just paid a $2.20 dividend but predicts it will be in trouble over the next 5 years with an
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- Brushy Mountain Mining Companys coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the companys earnings and dividends are declining at the constant rate of 4% per year. If D0 = 6 and rs = 14%, what is the estimated value of Brushy Mountains stock?Sawchuck Consulting has been profitable for the last 5 years, but it has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Year 0 1 2 3 4 5 6 7 Growth rate NA NA NA NA 50% 25% 8.00% 8.00% Dividends $0.000 $0.000 $0.000 $0.25 $0.38 $0.48 $0.52 $0.56 Use the rounded values of dividends (as given in the table above) for your subsequent calculations. Select the correct answer. a. $-20.32 b. $42.32 c. $47.54 d. $11.00 e. $37.10Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a rate of 60% in year 4, 30% in year 5, and then to increase it at a constant rate of 8.00% thereafter. Assuming a required return of 11.00%, What is your estimate of the stock's current value? Do not round your intermediate calculations.
- Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Use the dividend values provided in the table below for your calculations. Do not round your intermediate calculations. Year 0 1 2 3 4 5 6 Growth rate NA NA NA NA 90.00% 45.00% 8.00% Dividends $0.000 $0.000 $0.000 $0.250 $0.475 $0.689 $0.744 Select one: a. $14.22 b. $12.97 c. $11.87 d. $15.62 e. $17.18Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Year 0 1 2 3 4 5 6 Growth rate NA NA NA NA 50.00% 25.00% 8.00% Dividends $0.000 $0.000 $0.000 $0.250 $0.375 $0.469 $0.506 A. 9.94 B. 10.45 C. 10.99 D. 10.19 E. 10.72Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Use the dividend values provided in the table below for your calculations. Do not round your intermediate calculations. Year 0 1 2 3 4 5 6 Growth rate NA NA NA NA 60.00% 30.00% 8.00% Dividends $0.000 $0.000 $0.000 $0.250 $0.400 $0.520 $0.562
- Day and Associates is experiencing a period of abnormal growth. The last dividend paid by Day was $0.75. Next year, they anticipate growth in dividends and earnings of 25% followed by negative 5% growth in the second year. The company will level off to a normal growth rate of 8% in year three and is expected to maintain an 8% growth rate for the foreseeable future. Investors require a 12% rate of return on Day. The value of Day stock today is closest to?Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.75 coming 3 years from today. The dividend should grow rapidly - at a rate of 37% per year - during Years 4 and 5, but after Year 5, growth should be a constant 9% per year. If the required return on Computech is 13%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent.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.
- 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.).Hallo Ltd. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 30% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D , was RM1.50, its beta is 1.60, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? P/s : step by step calculations pls. do not use excel sheet. thank you.Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 41% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? Do not round intermediate calculations.
