An investor in Amman, Jordan, estimates that next year’s sales
for Amman Intercontinental Hotels, Inc. would amount to about 150
million Jordanian dinar. The company has 10 million shares
outstanding, generates a net profit margin of about 15%, and has a
payout ratio of 40%. All figures are expected to hold for next
year. Given this information, compute the following.
A. Estimated net earnings for next year
b. Next year’s dividends per share
c. The expected price of the stock (assuming the P/E ratio is 24.5
times earnings)
d. The expected holding period return (latest stock price: 40
Jordanian dinar per share)
Taurus Corp. had sales of $35 million in 2016 and is expected to
have sales of $51,230,000 for 2017. The company’s net profit margin
was 4% in 2016 and is expected to increase to 6% by 2017. Estimate
the company’s net profit for 2017.
Sirius Lawnmower Co. has total equity of $450 million and 150
million shares outstanding. Its ROE is 18%. Calculate the company’s
EPS.
Hydra Corporation has total equity of $300 million and 120
million shares outstanding. Its ROE is 20%. The EPS is 25%.
Calculate the company’s dividends per share (round to the nearest
penny).
HighTeck has an ROE of 15%. Its earnings per share are $2.00, and its dividends per share are $0.20. Estimate HighTeck’s growth rate.
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