Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

n 6 You are a financial analyst at Bank of America and you have collected following information for Lotus Tech Company. The company has beta

image text in transcribed
n 6 You are a financial analyst at Bank of America and you have collected following information for Lotus Tech Company. The company has beta of 1.5 and a ROE of 20%. The dividend payout ratio is 50%. Last twelve month earnings were 54 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 1396, and T-bills currently offer a 50 return. 1a. What is the intrinsic value of the stock? (input format: 515.32) 1b. What is PVGO (nput format: 515.32)t) 10. Suppose your research convinces you that company will announce momentarily that it will immediately change its dividend payout ratio to do. Find the intrinsic value of the stock. (input format: 515.32)tu

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Finance Markets, Investments, And Financial Management

Authors: Ronald W Melicher, Edgar Norton

13th Edition

0470128925, 9780470128923

More Books

Students also viewed these Finance questions