X-Ray Inc. recently paid its annual dividend of $4.80, and reported an ROE of 5%. The firm pays out 50% of earnings as dividends. Based on your analysis, you estimate that the stock has a required return of 7%. What is the intrinsic value of this stock? DO NOT ENTER THE $ SIGN. ALSO, ENTER YOUR ANSWER AS A POSITIVE NUMBER. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO TWO DECIMAL PLACES AT THE END, i.e. IF YOUR ANSWER IS 33.4348 ENTER IT AS 33.48 ONLY

Q: Dallas Home Supply paid an annual dividend of $2.40 a share last year. Yesterday, the firm announced…

A: Dividend paid last year (D0) is $2.40 Dividend in Year 1 (D1) = $2.40*(1+10%) = $2.64 Dividend in…

Q: ALPHO Inc. has paid annual dividends of $1.25 and $1.62, over the past two years. Dividends in the…

A: The current price of the stock is the present value of the share, based on the future expected…

Q: Nine Point Industries recently paid its annual dividend of $4.42, and reported an ROE of 8%. The…

A: given, d0 = $4.42 roe=8% dividend payout = 50% beta= 1.62 rf=3.45% rm=18%

Q: ABC Inc., is expected to pay an annual dividend of $5.1 per share next year. The required return is…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: Jarett & Sons's common stock currently trades at $38.00 a share. It is expected to pay an annual…

A: Given, Current Market Price = $38 D1 = $2.75 Growth rate = 7%

Q: b) Guzman Enterprises has three companies, Angel Inc., Charity Inc., and Joy Inc. Each of the…

A: Given information: D1 =$4 (For all three compnies)g=6% (for all three companies)r=9%,12%,15% for…

Q: Bon Chance, Inc., has an odd dividend policy. The company has just paid a dividend of $9.50 per…

A: In financial markets, it is a method of evaluating the intrinsic value of the stock. It is a…

Q: The current year profits of Levelex Inc. is 1.000.000₺ and expected profits for the next year is…

A: Constant dividend model is the model of share valuation in which the share price is calculated on…

Q: Pacific Wind and Solar pays a dividend at the end of the year of $6 per share, but over the year,…

A: The annual rate of return on the stock can be calculated as sum of dividend yield and capital gain…

Q: Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our…

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

Q: The newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report…

A: Calculation of Earnings Growth and Next Year’s Earnings:The earnings growth is 13.50%.

Q: Jarett & Sons's common stock currently trades at $32.00 a share. It is expected to pay an annual…

A: a. Cost of equity = (D1/share price)+ Dividend growth rate Cost of equity = ($1/$32) + 6% Cost of…

Q: Nyeil, Inc., is a consumer products firm that is growing at a constant rate of 6.5 percent. The…

A: Under the dividend discount model, the company is taking dividend paid as a basis for valuation of…

Q: General Importers announced that it will pay a dividend of $2.00 per share one year from today.…

A: The current price of a stock is calculated by discounting all the future dividends at the present…

Q: Old Nova Inc. just paid its dividend of €5 per share yesterday, which is expected to grow by 1.5%…

A: Value of stock can be found by the present value of dividend and present value of growth of…

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A: Cost of equity capital refers to the cost incurred by the firm or an individual in procuring equity…

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A: Current Share Price can be calculated by adding the present values of future dividends Dividend paid…

Q: Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next…

A: Stock Price is computed by adding discounted value of future benefits that investor will receive by…

Q: Steve's Specialties, Inc. paid its dividend yesterday, which as $1.50. The dividend has been growing…

A: Calculation of cost of retained earnings: Answer: Cost of retained earnings under CAPM model is…

Q: Carnes Cosmetics Co.'s stock price is $54, and it recently paid a $1.00 dividend. This dividend is…

A: To solve this question, first, we have to use the following formula: Price of share = Present value…

Q: Carnes Cosmetics Co.'s stock price is $60, and it recently paid a $1.25 dividend. This dividend is…

A: The question is based on the concept of valuation of securities in Financial Management.

Q: The Drogon Co. just issued a dividend of $2.85 per share on its common stock. The company is…

A: COST OF EQUITY :  = (NEXT YEAR DIVIDEND / PRICE) + GROWTH RATE

Q: Sidman Products's common stock currently sells for $42 a share. The firm is expected to earn $4.20…

A: An investor who invests in stock receives a regular dividend or the dividend grows every year at the…

Q: Redan, Inc., is expected to maintain a constant 5.4 percent growth rate in its dividends,…

A:

Q: Tresnan Brothers is expected to pay a $1.80 per share dividend at the end of the year (i.e., D1 =…

A: Current share value : it means current price of share at which share is currently trading ( buying…

Q: Collins Inc. has just paid its annual dividend of $2.2. The company expects that its dividends in…

A: Using the sum of the present values of all possible dividends to be received and the expected…

Q: Carnes Cosmetics Co.'s stock price is $37, and it recently paid a $1.25 dividend. This dividend is…

A: Price of stock is the present value of future dividends and value received in the future discounted…

Q: Last year, Big W Company reported earnings per share of $2.50 when its stock was selling for$50.00.…

A: P/E ratio = Current market price of share / Earnings per share.

Q: Last week, Baxter Industries paid their annual dividend of $3.34 on their common stock. The company…

A: Given information : Annual dividend = $3.34 Constant growth rate = 5% Current share price = $21.44…

Q: XYZ company paid a dividend of $4.66 in the past 12 months. The annual dividend growth rate is 6.93…

A: In this question we require to compute the current price of the stock. Formula: According to…

Q: Driver Products recently paid its annual dividend of $2, and reported an ROE of 15%.  The firm pays…

A: Given information: Annual dividend is $2.00 ROE is 15% Retention ratio is 50%, pay-out is 50% Stock…

Q: he newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report…

A: Hi, as per our policy we will answer the first three parts. Kindly repost the remaining parts…

Q: Steve's Specialties, Inc. paid its dividend yesterday, which as $3.00. The dividend has been growing…

A: Where, The yesterday's dividend is D0 = $3. The growth rate is g = 0.035. The price of the stock is…

Q: Assume that you are the financial staff of Vanderheiden Inc., and you have collected the following…

A: Cost of equity = [D1/P0(1-f)] + g where D1 = Next year dividend Po = Current stock price f =…

Q: Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all…

A: Dividend discount model is a security valuation method which is used to forecast or predict the…

Q: navel county choppers, inc., is experiencing rapid growth. the company expects dividends to grow at…

A: As per Dividend Discount Model,P12= D13/(ke-g)WhereD13 = Expected Dividend for year 13ke = Expected…

Q: The Foreman Company’s earnings and common stock dividends have been growing at an annual rate of 5…

A: Answer -  a. 10 percent Po = D1/(ke - g) g = 0.05 Do = $5 ke = 0.10 Dl = Do(1 + g) = 5(1 + .05) =…

Q: Carnes Cosmetics Co.'s stock price is $40, and it recently paid a $1.00 dividend. This dividend is…

A: in this we have to use dividend discount model to get value of stock.

Q: Eastern Electric's recent annual dividend was $1.64 per share and its stock currently sells for…

A: Dividend growth model is used to value companies stock and calculate return on equity. By Dividend…

Q: Suppose company Becker inc. has just paid a quarterly dividend of $2 per share, as it has for the…

A: Here, Given Information Dividend just paid =$2per quarter so annually it will be $8 Growth rate…

Q: Jarett & Sons's common stock currently trades at $29.00 a share. It is expected to pay an annual…

A: Calculate the cost of equity as follows: Cost of equity = (Expected dividend / Price) + growth rate…

Q: The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.65 per share on its stock. The…

A: Current stock price is the present value of future cashflows. As per dividend discount model current…

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.