Question

Zoom Enterprises expects that one year from now it will pay a total dividend of $4.9million...

Zoom Enterprises expects that one year from now it will pay a total dividend of $4.9million and repurchase $4.9 million worth of shares. It plans to spend

$9.8 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is

12.9% and it has 4.7 million shares outstanding, what is its share price today?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Maynard Steel plans to pay a dividend of $ 2.99 this year. The company has an...
Maynard Steel plans to pay a dividend of $ 2.99 this year. The company has an expected earnings growth rate of 4.3% per year and an equity cost of capital of 10.7%. a. Assuming​ Maynard's dividend payout rate and expected growth rate remain​ constant, and Maynard does not issue or repurchase​ shares, estimate​ Maynard's share price. b. Suppose Maynard decides to pay a dividend of $0.94 this year and use the remaining $2.05 per share to repurchase shares. If​ Maynard's...
AFW Industries has 178 million shares outstanding and expects earnings at the end of this year...
AFW Industries has 178 million shares outstanding and expects earnings at the end of this year of $703 million. AFW plans to pay out 63% of its earnings in​ total, paying 36% as a dividend and using 27% to repurchase shares. If​ AFW's earnings are expected to grow by 8.6% per year and these payout rates remain​ constant, determine​ AFW's share price assuming an equity cost of capital of 12.5%.
Tolo Co. plans the following​ repurchases: $ 10.3 million in one​ year, nothing in two​ years,...
Tolo Co. plans the following​ repurchases: $ 10.3 million in one​ year, nothing in two​ years, and $ 19.3 million in three years. After​ that, it will stop repurchasing and will issue dividends totaling $ 25.1 million in four years. The total paid in dividends is expected to increase by 2.7 % per year thereafter. If Tolo has 1.9 million shares outstanding and an equity cost of capital of 10.6 %​, what is its price per share​ today?
Tolo Co. plans the following​ repurchases: $9.7 million in one​ year, nothing in two​ years, and...
Tolo Co. plans the following​ repurchases: $9.7 million in one​ year, nothing in two​ years, and $19.9 million in three years. After​ that, it will stop repurchasing and will issue dividends totaling $25.6 million in four years. The total paid in dividends is expected to increase by 2.9% per year thereafter. If Tolo has 1.9 million shares outstanding and an equity cost of capital of 11.4%​, what is its price per share​ today?
1. Assume Gillette Corporation will pay an annual dividend of $0.63 one year from now. Analysts...
1. Assume Gillette Corporation will pay an annual dividend of $0.63 one year from now. Analysts expect this dividend to grow at 11.9% per year thereafter until the 66th year.​ Thereafter, growth will level off at 2.2% per year. According to the​dividend-discount model, what is the value of a share of Gillette stock if the​ firm's equity cost of capital is 8.9%​? The value of​ Gillette's stock is: ​(Round to the nearest​ cent.) 2. Portage Bay Enterprises has $3 million...
General Importers announced that it will pay a dividend of $3.65 per share one year from...
General Importers announced that it will pay a dividend of $3.65 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 4 years. Then, 6 years from today, the company will begin paying an annual dividend of $1.75 forever. The required return is 11.4 percent. What is the price of the stock today
A stock will pay a dividend of $3.5 exactly one year from now. Future dividends will...
A stock will pay a dividend of $3.5 exactly one year from now. Future dividends will grow at 19% for the following 2 years and then a constant 4% every year thereafter. If the stock's required rate of return is 13.2%, what is a fair price for the stock today? Round your answer to the nearest penny.
Harvey Gorman expects earnings of $$85.5 million at the end of the year (at t=1) and...
Harvey Gorman expects earnings of $$85.5 million at the end of the year (at t=1) and to pay dividends of $$40.5 million and buy back shares worth $$11.6 million. For the following 13years, earnings should grow at 17.4% annually (until ?=14), after which should grow at 3.5% for a long time. If the firm’s cost of equity capital is 13.2% and the dividend and repurchase rates are expected to stay unchanged, what is the total market value of the Harvey...
ABC expects to pay a dividend one year from now of $2.97. The dividend exhibits constant...
ABC expects to pay a dividend one year from now of $2.97. The dividend exhibits constant growth of 11.1%, and the current price of the stock is $96.92. Given all of this information, what is the expected rate of return for this stock under the Discounted Cash Flow model? (Show your answer as a decimal to four places, e.g., if you got 12.34% then input 0.1234)
ABC expects to pay a dividend one year from now of $2.73. The dividend exhibits constant...
ABC expects to pay a dividend one year from now of $2.73. The dividend exhibits constant growth of 7.9%, and the current price of the stock is $46.48. Given all of this information, what is the expected rate of return for this stock under the Discounted Cash Flow model? (Show your answer as a decimal to four places, e.g., if you got 12.34% then input 0.1234)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT