Question 1

Suppose a firm has just reported an EPS of $4.55 and expects to maintain a dividend payout ratio of 48 percent.The firm's price-earnings ratio is 11 and its return on equity is 17.36 percent.
A) What is current dividend?
B) What is growth rate?
C) What is current stock price?
D) What is its required rate of return?

Accepted Answer

The answer of Suppose a firm has just reported an...

Question 2

Rustic Corporation has earnings per share of $2.50 and paid a dividend of $1.75 per share.The firm's ROE and P/E are 15% and 20,respectively.Calculate the following:
A) The current stock price
B) The required rate of return
C) The dividend yield

Accepted Answer

The answer of Rustic Corporation has earnings per share of...

Question 3

Elves Corporation has just paid a dividend of $1.25.Dividends are expected to grow at 15% for years 1-3,30% for years 4-6,10% for years 7-8,and 4% thereafter.What should the stock sell for today if the required return is 16 percent?

Accepted Answer

The answer of Elves Corporation has just paid a dividend...

Quiz 7: Equity Valuation

Rustic Corporation has earnings per share of $2.50 and paid a dividend of $1.75 per share.The firm's ROE and P/E are 15% and 20,respectively.Calculate the following: A) The current stock price B) The required rate of return C) The dividend yield

Elves Corporation has just paid a dividend of $1.25.Dividends are expected to grow at 15% for years 1-3,30% for years 4-6,10% for years 7-8,and 4% thereafter.What should the stock sell for today if the required return is 16 percent?