If Walmart (WMT) recently earned a profit of $5.10 per share and has a P/E ratio of 16.25. The dividend has been growing at a 6 percent rate over the past few years. If this growth continues, what would be the stock price in five years if the P/E ratio remained unchanged? What would the price be if the P/E ratio declined to 12 in five years? A.$110.91, $81.90 respectively B.$82.88, $61.20 respectively C.$414.38, $306.00 respectively D.$41.44, $30.60 respectively

If Walmart (WMT) recently earned a profit of $5.10 per share and has a P/E ratio of 16.25. The dividend has been growing at a 6 percent rate over the past few years. If this growth continues, what would be the stock price in five years if the P/E ratio remained unchanged? What would the price be if the P/E ratio declined to 12 in five years? A.$110.91, $81.90 respectively B.$82.88, $61.20 respectively C.$414.38, $306.00 respectively D.$41.44, $30.60 respectively

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 9P

See similar textbooks

Similar questions

Last year, Big W Company reported earnings per share of $2.50 when its stock was selling for$50.00. If its earnings this year increase by 10 percent and the P/E ratio remains constant, whatwill be the price of its stock? Explain.
Ivanhoe, Inc., is a mature firm that is growing at a constant rate of 5.62 percent per year. The last dividend that the firm paid was $1.60 per share. If dividends are expected to grow at the same rate as the firm and the required rate of return on Ivanhoe’s stock is 14 percent, what is the market value of the company’s stock? (Round answer to 2 decimal places, e.g. 52.75.) Market value of the company’s stock_____
Oriole, Inc., is a mature firm that is growing at a constant rate of 7.15 percent per year. The last dividend that the firm paid was $1.20 per share. If dividends are expected to grow at the same rate as the firm and the required rate of return on Oriole’s stock is 12 percent, what is the market value of the company’s stock? (Round answer to 2 decimal places, e.g. 52.75.)
Last year, Rec Room Sports reported earnings per share of $8.50 when its stock price was $212.50.This year, its earnings increased by 20 percent. If the P/E ratio remains constant, what is likely tobe the price of the stock? Explain
Synovec Corporation is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth rate falling off to a constant 6.3 percent, thereafter. If the required return is 15 percent and the company just paid a dividend of $2.90, what is the current share price? Please show equations and what each letter is in the equation means. Thanks!
The Coca-Cola Company (KO) paid a dividend of $1.66 in the last year. If analysts expect that the dividend will grow 12% per year going forward, and the current stock price is $54.48 per share, what is the return shareholders are expecting?
A company paid dividends of 12 cents per share this year. For the next five years, the company expects to increase their dividend by 20% per year. After that, they expect dividends to grow at 4% per year. If interest rates are 9%, what is the price of this stock? $8.09 $0.98 $4.84 $4.59 A company is expected to pay a dividend of $3 next year, $2 one year after then, then $1 one year after that. Then, the company expects to increase dividends again, increasing dividends by 10% per year. If the interest rate is 12%, what is the price of this stock? $57.37 $55.00 $44.13 $83.33 show me how to do on ba 2 calculator i am lost
navel county choppers, inc., is experiencing rapid growth. the company expects dividends to grow at 21 percent per year for the next 12 years before leveling off at 5 percent into perpetuity. the required return on the company’s stock is 12 percent. if the dividend per share just paid was $1.62, what is the stock price? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth rate falling off to a constant 6.3 percent thereafter. A. If the required return is 15 percent and the company just paid a dividend of $2.90, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Synovec Corporation is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth. rate falling off to a constant 6.8 percent, thereafter. The required return is 15 percent and the company just paid a dividend of $3.15. What are the dividends each year for the next four years? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g.. 32.16. What is the share price in three years? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.
The Square Hospital has been very successful in the past four years. Over these years, it paid commonstock dividend of $4 in the first year, $4.20 in the second year, $4.41 in the third year, and its mostrecent dividend was $4.63. The company wishes to continue this dividend growth indefinitely. What isthe value of the company's stock if the required rate of return is 12 percent?