Question

Apple Inc. has expected earnings of $6 per share for next year. The company's return on equity ROE is 20% and its earnings retention ratio is 70%. If the company's market capitalization rate is 15%, what is the present value of its growth opportunities if the company's expected P/E ratio is 30?

Answer #1

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Abel, Inc., has expected earnings of $3 per share for next year.
The firm's ROE is 20%, and its earnings retention ratio is 50%. If
the firm's market required rate on the stock is 15%, what is the
present value of its growth opportunities?
A. Less than $12
B. Higher than $12 but less than $15
C. Higher than $18 but less than $20
D. Higher than $22

A.
Growth and Value A firm has projected earnings
of $6 per share for next year and has a 30% dividend payout ratio.
The firm's required return is 13%. The firm's ROE is 14%. What is
the intrinsic value of the stock?
$56.25
$54.33
$50.77
$49.65
B.
Value of Growth Opportunities A firm has
projected annual earnings per share of $4.00 and a dividend payout
ratio of 60%. The firm's required return is 11% and dividends and
earnings are expected...

Brothers Corp expects to earn $6 per share next year. The firm’s
ROE is 15% and its plowback ratio is 50%. If the firm’s market
capitalization rate is 13%, what is the present value of its growth
opportunities?

INR Ltd’s earnings per share next year is expected to be $2.20
and the earnings are expected to grow at 5% p.a. for the
foreseeable future. Its required rate of return on equity has been
estimated to be 9% p.a. The company has a policy of reinvesting 40%
of its earnings. The present value of the company's growth
opportunities is closest to:

Sisters Corp. expects to earn $6 per share next year. The firm’s
ROE is 15% and its plowback ratio is 60%. The firm’s market
capitalization rate is 10%.
a. Calculate the price with the constant
dividend growth model.
b. Calculate the price with no growth.
c. What is the present value of its growth opportunities?

Sisters Corp expects to earn $6 per share next year. The firm’s
ROE is 15% and its plowback ratio is 60%. If the firm’s market
capitalization rate is 10%.
a. Calculate the price with the constant dividend growth
model.
b. Calculate the price with no growth.
c. What is the present value of its growth opportunities?

RNN Ltd’s earnings per share next year is expected to be $2.00
and the earnings are expected to grow at 5% p.a. for the
foreseeable future. Its required rate of return on equity has been
estimated to be 8% p.a. The company has a policy of reinvesting 40%
of its earnings. The present value of the company's growth
opportunities is closest to:
Group of answer choices $15.00 $16.70. $41.70. $25.00.

Assume that the Vana Inc. Corporation’s expected earnings per
share (E1) are $12, its dividend payout ratio is 70%,
and its return on equity (ROE) is 20%. The investors’ required rate
of return (k) on the stock is 10% per year. What is the company’s
present value of growth opportunity (PVGO)? ******PLEASE SHOW
WORK

Share X has Earnings Per Share of 12 and its Present Value of
Growth Opportunities is $101.34. Given a market capitalization rate
of 18.85%, and a plowback ratio of 45%
calculate the Return on Equity for Share X.

Sisters Corp. expects to earn $6 per share next year. The firm’s
ROE is 16% and its plowback ratio is 60%. If the firm’s market
capitalization rate is 10%.
a. Calculate the price with the constant dividend
growth model. (Do not round intermediate
calculations.)
b. Calculate the price with no growth.
c. What is the present value of its growth
opportunities? (Do not round intermediate
calculations.)

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