Fundamentals of investments: 7th edition chapter 6

Q30: Use the information from the previous problem and calculate the stock price with the clean surplus dividend. Do you get the same stock price as in the previous problem? Why or why not?

Use the following information to answer Problems 27-31. Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of a line of health care and pharmaceutical products. Below you will find selected information from Value Line. Use the Value Line estimated 2012 figures as the actual year-end figures for the company. The beta reported was .40 and the risk-free rate was 2.75 percent Assume a market risk premium of 7 percent. 2008T200972 01072011-2012120131-eVALUELINEPUBLLCFET- 33.05 8.50 6.50 1.44 1.601.7188 204 216Div'ds Deel'd per sh B2.40 90 22.25 15224 1551.9 15470 1570.4 1570.0 1560.0 Common Shs Oust'g 1550.0 15.0 1.00 2.6% 19.40 19.82 22.73 24.7425.65 21.05 Sales per sh 432| 509| 5.90| 661| 660 | 7301-cashFlow" per sh 303 3724.1746500535 Earnings per sh A 95 85 75 Capl Spending per sh 1148 1473 144551705 18.25Book Value per sh 18.3 13.0 22122Bold figures are Avg Ann'IPIE Ratio 1.10 87 78 79lene Relative P/E Ratio 2.6% | 3.3% | 3.5% | 3.5%| estnlates 29528 | 30766| 35167| 38851 | 40250| 42850| Sales($mil 25.5% | 288% | 303% | 31.2% | 31.3% | 31.5% |Operating Margin 1838.8 2089.3 26243 3043.93100 3050Depreciation (Smill 47342 5805.2 6501.1 7331.0 7880 8350 Net Profit (Smil) 19.2% | 17.0% | 15.0% | 15.0% | 15.5% | 16.0%Income Tax Rate 16.0% 18.9% | 18.5% | 18.9% | 13.6%| 13.5% |Net Profit Margin Ava Ann'l Divd Yield 51200 31.0% 3150 0050 170% 19.6% 5450.7 10264 5055.1 8288.57800 7900 Working Cap(Smil9500 8713.3 11266 1252412040 11500 10800 Long-Term Debt (Smil9000 34500 18.8% | 17.5% | 19.1%| 20.5% | 19.0% | 19.5%|Return onTotal Cap'l | 23.0% 290% 18.0% 37% 17480 22856 22388 24440 26750 23500 Shr. Equity Smill 71% 254% | 290% 30.0%| 29.5% 29.5%|Return on Shr. Equity 14.6% | 14.8% | 17.1%| 18.0% | 17.5% | 18.0% Retained to Com Eq 46%| 4296| 41%| 40%| 40%| 38%|AllDiv'ds to Net Prof The high and low share prices each year were 2008 2009 2010 2011 2012 High $61.10 $57.40 $56.80 $56.40 $61.50 54.00 Low 45.80 41.30 44.60 45.10