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Please answer the attached questions in excel format. Need ASAP. Thank you 7-3 Woidtke Manufacturing's stock currently sells for $22 a share. The stock just
Please answer the attached questions in excel format. Need ASAP. Thank you
7-3 Woidtke Manufacturing's stock currently sells for $22 a share. The stock just paid a dividend of $1.20 a share (i.e.,D0=$1.20), and the dividend is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the estimated required rate of return on Woidtke's stock (assume the market is in equilibrium with the required return equal to the expected return)? 7-4 Nick's Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $50 a share. What is the stock's required rate of return (assume the market is in equilibrium with the required return equal to the expected return)? 7-5 A company currently pays a dividend of $2 per share (D0=$2). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stock's current price? 7-9 Crisp cookware's common stock is expected to pay a dividend of $3 a share at the end of the year (D1 = $3.00), and its betta is 0.8; the risk-free rate is %5.2; and the market risk premium is %6. The dividend is expected to grow at some constant rate g, and the stock currently sells for $40 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is P3). 7-12 Assume that the average firm in your company's industry is expected to grow at a constant rate of 7% and that its dividend yield is 6%. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&D work that leads you to expect that its earnings and dividends will grow at a rate of 50% [D1 = D0 (1 + g) = D0(1.50)] this year and 25% the following year, after which growth should return to the 7% industry average. If the last dividend paid (D0) was $2.5, what is the value per share of your firm's stock? Round your answer to the nearest cent. Do not round your intermediate computations. 7-13 Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of it's earnings. However, investors expect Simpkins to begin paying and dividends, with the first dividend of $.50 coming 3 years from today. The dividend should grow rapidly at a rate of 80% per year during years 4 and 5. After year 5, the company should grow at a constant rate of 7% per year. If the required return on the stock is 16%, what is the value of the stock today? (assume the market is in equilibrium with the required return equal to the expected return.) 7-14 Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 10% of its $100 par value. Preferred stock of this type currently yields 8%. Assume dividends are paid annually. a. What is the value of Rolen's preferred stock? Round your answer to the nearest cent. b. Suppose interest rate levels have risen to the point where the preferred stock now yields 11%. What would be the new value of Rolen's preferred stock? Round your answer to the nearest cent. Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 7%. The company's weighted average cost of capital is 13%. 1. What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent. 2. Calculate the value of Kendra's operations. Round your answer to the nearest cent. Round intermediate calculations to two decimal places. 7-18 Dozier Corporation is a fast growing supplier of office products. Analyst project the following free cash flows during the next 3 years, after which fcf is expected to grow at a constant 7% rate. Dozier's WACC is 13% Year 1 2 3 Free Cash Flow -20mil 30mil 40 mil A) What id doziers terminal, or horizon, value? B) What is the firm's value today? C) Suppose Dozier has $100 million of debt and 10 million shares of stock outstanding. What is your estimate of the current price share? 7-20 Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 15% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology, and RT's growth rate will slow to 7% per year indefinitely. Stockholders require a return of 12% on RT's stock. The most recent annual dividend (D0), which was paid yesterday, was $1.30 per share. Calculate RT's expected dividends for t = 1, t = 2, t = 3, t = 4, and t = 5. Round your answers to the nearest cent. Calculate the estimated intrinsic value of the stock today, . Proceed by finding the present value of the dividends expected at t = 1, t = 2, t = 3, t = 4, and t = 5 plus the present value of the stock price that should exist at t = 5, . The stock price can be found by using the constant growth equation. Note that to find you use the dividend expected t = 6, which is 7% greater than the t = 5 dividend. Round your answer to the nearest cent. Do not round your intermediate computations. Calculate the expected dividend yield (D1/), the capital gains yield expected during the first year, and the expected total return (dividend yield plus capital gains yield) during the first year. (Assume that = P0, and recognize that the capital gains yield is equal to the total return minus the dividend yield.). Round your answers to two decimal places. Do not round your intermediate computations. Also calculate these same three yields for t = 5 (e.g., D6/). Round your answers to two decimal places. Do not round your intermediate computationsStep by Step Solution
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