Chiptech, Inc. an established computer chi firm with several profitabing products as well as some promising new prouts in development. The company earned $300 sharest year, and just gold out dividend of 80 per share. Investors bereve the company plans to maintain te didendayout ratio et 20. ROE equals 26Everyone in the market expect this tution to per inden 6. What is the manet price of Chiptech stock? The required return for the computer chip Industry is 23% and the company has gone er vidend te the next dividend wil be paid a year from now, st. (Do not found intermediate calculations. Hound your Answer to 2 decimal places) La Nocheck b. Suppose you discover that Chiptech's competitor has developed a new ep that will minste Chiptech's current technological dinge in this market. This new product, which will be ready to come to the market in two years, wil force Chiptech to reduce the prices of this to remain competitive. This will decrease ROE. 23. ad, because of sing demand for product. Chiptech will decrease the plowback ratio to 07 The plowback radio will be decreased at the end of me second year, otr-2 The annual year and dividend for the second year past t-2 will be 30% of that year's earnings What is your state of Chiptech's intele value per there! (Hint: Carefully prepare a table of Chiptech's ings and dividends for each of these three years. Pay close attention to the change in the payout ratio in t-2)[Round your answers to 2 decimal places) M2 Nime No one else in the market perceives the threat to Chietech's market in fact, you are confident that no one else will become aware of the change in Chiptech's compettive status und the compete fim pubilyarnounces i cavery near the end of year 2 What will be the rate of return on Chiptech stock in the coming year te, between randt (Hint for parts through Pay attention to when the marker catches on to the new station. A table of dividends and market prices over time might help (Do not round Intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places) d. What will be the rate of return on Chiptech stock in the second year between thind 1-2 Do not found intermediate calculations Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places) What will be the rate ofrenan Chipech stock in the there year betiens-2nd Dentrond Intermediate Calcons Negebe mount should be indicated by a minus sign Round your owwerte 2 dedmal places Chiptech, Inc. is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $3.00 a share last year and just paid out a dividend of $0 60 per share Investors believe the company plans to maintain its dividend payout ratio at 20% ROE equals 26%. Everyone in the market expects this situation to persist indefinitely a. What is the market price of Chiptech stock? The required return for the computer chip industry is 23%, and the company has just gone ex dividend te the next dividend will be paid a year from now, at r= 1). (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Market price of Chiptech stock b. Suppose you discover that Chiptech's competitor has developed a new chip that will eliminate Chaptech's current technological advantage in this market. This new product, which will be ready to come to the market in two years will force Chiptech to reduce the prices of its chips to remain competitive This will decrease ROE to 23%, and because of falling demand for its product, Chiptech will decrease the plowback to to O2 The plowback ratio will be decreased at the end of the second year, at 2: The annual year and dividend for the second year (paid at 1-2) will be 30% of that year's earnings. What is your estimate of Chiptech's intrinsic value per shero? (Hint Carefully prepare a table of Chiptech's carrings and dividends for each of the next three years Pay close attention to the change in the payout ratio in T-23 (Round your answers to 2 decimal places) At c. No one else in the market perceives the threat to Chiptech's market in fact you are confident that no one else will become aware of the change in Chiptech's competitive status until the competitor firm publicly announces its discovery near the end of year 2 What will be the rate of return on Chiptech stock in the coming year (ie between t= 0 and 1 = 1)? (Hint for parts c through e Pay attention to when the market catches on to the new situation A table of dividends and market prices over time might help) (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return d. What will be the rate of return on Chiptech stock in the second year (between-1 and 1= 2)? (Do not round Intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return e. What will be the rate of return on Chiptech stock in the third year (between t - 2 and 3)? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Role often Chiptech, Inc. is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $3.00 a share last year, and just paid out a dividend of $0.60 per share Investors believe the company plans to maintain its dividend payout ratio at 20% ROE equals 26% Everyone in the market expects this situation to persist Indefinitely a. What is the market price of Chiptech Stock? The required return for the computer chip industry is 23%, and the company has just gone ex dividend te the next dividend will be paid a year from now, at 1= 1. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Market price of Chiptech stock b. Suppose you discover that Chiptech's competitor has developed a new chip that will eliminate Chiptech's current technological advantage in this market. The new product, which will be ready to come to the market in two years, will force Chiptech to reduce the prices of its chips to remain competitive This will decrease RPE to 23% and, because of falling demand for its product, Chiptech will decrease the powback ratio to 07 The plowback ratio will be decreased at the end of the second year, at t= 2. The annual year end dividend for the second year (paid att-2) will be 30% of that year's earnings. What is your estimate of Chiptech's intrinsic value per share? (Hint Carefully prepare a table of chiptechs earnings and dividends for each of the next three years pay close attention to the change in the payout ratio in r= 2) (Round your answers to 2 decimal places.) Al time 2 At time 0 c. No one else in the market perceives the threat to Chiptech's market. In fact, you are confident that no one else will become aware of the change in Chiptech's competitive status until the competitor firm publicly announces its discovery near the end of year 2. What will be the rate of return on Chiptech stock in the coming year between 0 and 1) (Hint for parts through o Pay attention to when the market catches on to the new situation A table of dividends and market prices over time might help)(Do not round, intermediate calculations, Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return d. What will be the rate of return on Chiptech stock in the second year (between 1 and 2 (Do not round intermediate calculations, Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of retum e. What will be the rate of return on Chiptech stock in the third year (betweent 2 and 1= 3)? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return