Question
PLEASE EXPLAIN WITH FORMULA. THANK YOU Wilderness Adventures has earnings per share of $2.45 and dividends per share of $1.05. The total equity of the
PLEASE EXPLAIN WITH FORMULA. THANK YOU
Wilderness Adventures has earnings per share of $2.45 and dividends per share of $1.05. The total equity of the firm is $850,000. There are 40,000 shares of stock outstanding. What is the sustainable rate of growth? A) 2.14% B) 3.31% C) 5.68% D) 6.59%
Southern Foods just paid an annual dividend of $1.10 a share. Management estimates the dividend will increase by 10 percent a year for the next four years. After that, the annual dividend growth rate is estimated at 3.2 percent. The required rate of return is 12 percent. What is the value of this stock today? A) 16.21 B) 12.55 C) 14.54 D) 13.00
Newcomer Mills is a relatively new firm which will retain all of its earnings for the next four years. Four years from now, the firm expects to pay its first dividend of $0.25 a share. After that, it intends to increase the dividend by 4 percent annually. What is the value of this stock today at a discount rate of 12 percent? A) 2.22 B) 2.04 C) 2.60 D) 1.53
Stuart, Inc. reported net income(after tax) of $20 million for last year. Depreciation expense totaled $15 million and capital expenditures came to $5 million. Free cash flow is expected to grow at a rate of 6% for the foreseeable future. Stuart faces a 40% tax rate and has a 0.30 debt to equity ratio with $75 million (market value) in debt outstanding. Stuart's equity beta is 1.1, the risk-free rate is currently 6% and the market risk premium is estimated to be 8.0%. What is the current value (in millions) of Stuart's equity? A) 237.34 B) 427.42 C) 352.42 D) 502.42
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