Question

Question 3 You are trying to value the stock of XYZ Corp. Total earnings for year...

Question 3

You are trying to value the stock of XYZ Corp. Total earnings for year 1 are forecasted to be $157 million. You know that the company plans on paying out 11% of its earnings in the form of dividends and 27% in the form of share repurchases each year, and that all of the growth in future earnings will be through retained earnings. The company's return on new investment is 15%, its cost of equity is 12% and it has 87 million shares outstanding. Given this information, estimate the current share price for XYZ Corp. Round your answer to two decimals (do not include the $-symbol in your answer).

Homework Answers

Answer #1

Answer is as follows:

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 3 ABC Corp. currently has $32 million in excess cash that it plans on returning...
Question 3 ABC Corp. currently has $32 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $18 and it has 28.5 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will the share price of ABC be after it pays the dividend? Round your answer to two decimals (do not include the $-symbol in your answer) Question 4...
Question 2 ABC Corp. currently has $12 million in excess cash that it plans on returning...
Question 2 ABC Corp. currently has $12 million in excess cash that it plans on returning to its shareholders through a dividend payment. ABC's current share price is $24.4 and it has 34.8 million shares outstanding. In addition, the market value of the company's debt is $7 million. Assuming perfect markets, what is the dividend per share that ABC will be able to pay with the excess cash? Round your answer to two decimals (do not include the $-symbol in...
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its...
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its shareholders through a share repurchase. XYZ's current share price is $16.9 and it currently has 25.6 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will XYZ's share price be after it uses the excess cash to repurchase shares? Round your answer to two decimals (don't include the $-symbol in your answer).
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its...
XYZ Corp. currently has $37 million in excess cash that it plans on returning to its shareholders through a share repurchase. XYZ's current share price is $16.9 and it currently has 25.6 million shares outstanding. In addition, the market value of the company's debt is $14 million. Assuming perfect markets, what will XYZ's share price be after it uses the excess cash to repurchase shares? Round your answer to two decimals (don't include the $-symbol in your answer).
XYZ Corp has 90,000 shares of $2 par value common stock outstanding . XYZ declared and...
XYZ Corp has 90,000 shares of $2 par value common stock outstanding . XYZ declared and distributed a 10% stock dividend when the market price of its stock was $12.00 per share. In recording this stock dividend transaction, A) Retained Earnings is credited for $108,000 B) Paid in capital in excess of par value is credited for $7,200 C) Retained Earnings is debited for $$108,000 D) Retained Earnings is debited for $18,000 2)  A corporation repurchased 1,000 shares of its $1.00...
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%.
you expect a company will have earnings per share of $2 for the upcoming year. the...
you expect a company will have earnings per share of $2 for the upcoming year. the company plans to retain all of its earnings for the years 1-3. For the subsequent two years (years 4&5). the firm plans on retaining 50% of its earnings. It will then retain only 25% of its earnings from that point forward. retained earnings will be invested in projects with an expected return of 20% per year. if the company's equity cost capital is 9%...
SRC Inc. had additions to retained earnings for the year just ended of $515,333. The firm...
SRC Inc. had additions to retained earnings for the year just ended of $515,333. The firm paid out $150,000 in cash dividends and it has ending total equity of $5 million. The firm has 530,091 shares outstanding. The current price is $55 per share. Calculate earnings per share. Format your answer with 2 decimals, for example, 1.34. 2. SRC Inc. had additions to retained earnings for the year just ended of $558,557. The firm paid out $150,000 in cash dividends...
Market analysts expect the earnings per share of Dazza Corp to be $2.00 next year. The...
Market analysts expect the earnings per share of Dazza Corp to be $2.00 next year. The earnings per share are expected to grow at 8% p.a. forever and the firm typically retains 80% of its earnings. Analysts believe that this policy will continue in the foreseeable future. If investors require a return of 12%, the company's expected (or forward) price-to-earnings ratio will be closest to: Group of answer choices 20.00. 5.00. 6.70. 10.00.
4. Dividend Policy Decisions Friendly Corp had a banner year with earnings of $ 3 million....
4. Dividend Policy Decisions Friendly Corp had a banner year with earnings of $ 3 million. Those earnings made their Retained Earnings balance jumped to $ 5 million. The rest of the Balance Sheet is: Cash $ 250,000 Accounts Payable 350,000 Accounts Receivable 500,000 Goodwill 1,850,000 Property, Plant and Equipment 6,000,000 L/T Debt 1,250,000 Common Stock 2,000,000 Retained Earnings 5,000,000 Required: a. Should the board declare a $ 1 million cash dividend in 6 months because of its earnings record...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT