Question
Can you answer these questions for 3 firms total for me? Choose 3 firms that interest you and download their financial statements from any of
Can you answer these questions for 3 firms total for me?
Choose 3 firms that interest you and download their financial statements from any of these websites: finance.yahoo.com, finance.google.com, money.msn.com.
Part A:
a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividend per share, and the net income. Record them in a spreadsheet.
b. Calculate the total amount of dividends paid (dividends per share X number of shares outstanding), the dividend payout ratio (total dividends paid / net income), and the plowback ratio (1-dividend payout ratio)
c. Compute the sustainable growth rate, g=b x roe, where b equals to the plowback ratio.
d. Compare the growth rates (g) with the P/E ratios of the firm by plotting the P/Es against the growth rates in a scatter diagram. Is there a relationship between the two?
e. For each firm, compare the three-year growth rate of earnings per share with the growth rate you calculated above. Is the actual rate of earnings growth correlated with the sustainable growth rate you calculated?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started