Question

14. FedEx expects to pay a dividend next year of $5.60 /share, which would be a...

14.

FedEx expects to pay a dividend next year of $5.60 /share, which would be a growth rate of 10%. The required return is 20%. The value of a share of FedEx’s common stock is _________.

15.

The risk-free rate is 6%, the market return is 12% annually. Hasbro has a beta of 1.3 expects to offer a constant dividend of $5.20/share. Hasbro is being sued for copying other products and the beta of the stock goes up to 1.6. The price of the stock now is:

16.

Salesforce has both debt and equity. The debt portion is 45%. They may issue new bonds at a YTM of 10% and the tax rate is 30%. If the firm's WACC is 12% find the firm’s cost of equity.

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
ABC Corporation expects to pay a dividend of $2 per share next year, and the dividend...
ABC Corporation expects to pay a dividend of $2 per share next year, and the dividend payout ratio is 80 percent. Dividends are expected to grow at a constant rate of 8 percent forever.Suppose the company's equity beta is 1.21, the market risk premius is 9%, and the risk free rate is 5%. Calculate the present value of growth opportunities.
ABC Corporation expects to pay a dividend of $2 per share next year, and the dividend...
ABC Corporation expects to pay a dividend of $2 per share next year, and the dividend payout ratio is 80 percent. Dividends are expected to grow at a constant rate of 8 percent forever.Suppose the company's equity beta is 1.21, the market risk premius is 9%, and the risk free rate is 5%. Calculate the present value of growth opportunities.
Company ABC expects to pay a dividend per share of $10 next year, which represents 100%...
Company ABC expects to pay a dividend per share of $10 next year, which represents 100% of its earning. The expected return from investors is 10%. The company's return on equity is 12%. a) Calculate the price of a share assuming that the company pays out 100% of its earning in dividend. b) Calculate the price of a share if the company decides to plowback 80% of its earning into the firm's operations and investments. c) Assuming a plowback ratio...
Your firm is going to pay dividend $1 per share in the next year. The current...
Your firm is going to pay dividend $1 per share in the next year. The current stock price is $10 per share Firm beta is 10% higher than market average Constant growth rate is 5% Market risk premium is 10% and risk free rate is 2% Market value of common stock is $100 million and market value of debt is $200 million No preferred stock Cost of borrowing/issuing bond is 5% Corporate tax rate 40% What is the cost of...
The current market price of a firm’s common stock is $55 per share. The firm expects...
The current market price of a firm’s common stock is $55 per share. The firm expects to pay a dividend of $4.10 at the end of the coming year, 2013.   Using the growth rate from question 4, calculate the required rate of return of this common stock assuming that the applicable tax rate is 21%. A firm is wishing to calculate its cost of common stock equity by using the CAPM. The firm’s investment advisors and its own analysts indicate...
Laurel Enterprises expects earnings next year of $4 per share. The company will pay out all...
Laurel Enterprises expects earnings next year of $4 per share. The company will pay out all of its earnings to investors. Its expected return on new investment (i.e., ROE) is 12%. The required rate of return is 10%. What is the intrinsic value of the stock today? Laurel Enterprises expects earnings next year of $4 per share. The company will retain $2.4 of its earnings to reinvest in new projects that have an expected return of 12% per year (i.e.,...
A company's recent dividend is $1 per share. The company expects that the dividends will grow...
A company's recent dividend is $1 per share. The company expects that the dividends will grow at 10% for the next three years. After that the dividends will increase at 7% forever. Its stock beta is 1.0. Currently, the expected market return is 12%, and the risk-free rate is 7%. What is the present value of the common stock?
Contact Corporation just paid a dividend of $1.50 per share. The company expects that the dividend...
Contact Corporation just paid a dividend of $1.50 per share. The company expects that the dividend will grow at a rate of 10% for the next two years. After year two it is expected that the dividend will decline at a rate of 3% indefinitely. If the required return is 12%, what is the value of a share of stock?
Northern Co. expects to pay a dividend of $1 per share next year, which will grow...
Northern Co. expects to pay a dividend of $1 per share next year, which will grow at 10% for the following 5 years. Afterwards, the growth becomes 2%. The cost of capital for Northern Co. is 8%. What is today's share price of Northern Co.?
16) Firm TUV expects to earn $6 per share next year. In the next three years,...
16) Firm TUV expects to earn $6 per share next year. In the next three years, the firm’s ROE is expected to be 12%, 15%, 18%, respectively, and its dividend payout ratio is 90%. After that, the firm's ROE is expected to increase to 25%, and the firm will set the dividend payout ratio = 60%. Assume that the discount rate is 20%. Find the stock price
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT