CORPORATE FIN CUSTOM W/MYFINANCELAB
3rd Edition
ISBN: 9781323159859
Author: Berk
Publisher: PEARSON C
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Textbook Question
Chapter 9, Problem 15P
Halliford Corporation expects to have earnings this earring year of $3 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 50% of its earnings. It will then retain 20% of its earnings from that point onward. Each year,
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Derry Corporation is expected to have an EBIT of $2,300,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $100,000, and $140,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $12,000,000 in debt and 1,000,000 shares outstanding. At Year 5, you believe that the company's sales will be $18,910,000 and the appropriate price-sales ratio is 2.5. The company’s WACC is 8.8 percent and the tax rate is 25 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer is complete but not entirely correct.
Share price
$26.94selected answer incorrect
Chapter 9 Solutions
CORPORATE FIN CUSTOM W/MYFINANCELAB
Ch. 9.1 - How do you calculate the total return of a stock?Ch. 9.1 - Prob. 2CCCh. 9.1 - Prob. 3CCCh. 9.2 - In what three ways can a firm increase its future...Ch. 9.2 - Under what circumstances can a firm increase its...Ch. 9.3 - How does the growth rate used in the total payout...Ch. 9.3 - Prob. 2CCCh. 9.3 - Prob. 3CCCh. 9.4 - Prob. 1CCCh. 9.4 - What implicit assumptions are made when valuing a...
Ch. 9.5 - State the efficient market hypothesis.Ch. 9.5 - Prob. 2CCCh. 9 - Assume Evco, Inc., has a current price of 50 and...Ch. 9 - Anle corporation has a current price of 20, is...Ch. 9 - Suppose Acap Corporation will pay a dividend of...Ch. 9 - Prob. 4PCh. 9 - NoGrowth Corporation currently pays a dividend of...Ch. 9 - Summit Systems will pay a dividend of 1.50 this...Ch. 9 - Prob. 7PCh. 9 - Prob. 8PCh. 9 - In 2006 and 2007, Kenneth Cole Productions (KCP)...Ch. 9 - Prob. 10PCh. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Prob. 13PCh. 9 - Prob. 14PCh. 9 - Halliford Corporation expects to have earnings...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Suppose that In January 2006, Kenneth Cole...Ch. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - Prob. 30PCh. 9 - Prob. 31PCh. 9 - Prob. 32P
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