Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE I NEED IT ASAP 1) Earnings per common share of ABC Industries for the current year are expected to be $5.00 and to grow

PLEASE I NEED IT ASAP

1)

Earnings per common share of ABC Industries for the current year are expected to be $5.00 and to grow 8% per year over the next 4 years. At the end of the 5 years, earnings growth rate is expected to fall to 6.5% and continue at that rate for the foreseeable future. ABCs dividend payout ratio is 45%. If the expected return on ABC's common shares is 18%, what is the terminal (horizon) value of the stock at the beginning of year 6?

Multiple Choice

$24.30

$30.20

$30.61

$28.35

$26.25

2)

Dreamers Inc. generated $10 per share over the last year. They also paid $3 dividend per share to their shareholders. If the ROE of the company is 15%, what is the expected dividend growth rate?

Multiple Choice

12.50%

30%

10.50%

5%

15%

3)You just borrowed $10,000. You're planning to pay $500 per month. If the annual percentage rate is 10.50%, how long does it take to pay off the loan?

Multiple Choice

26 years.

22 years.

20 years.

Further information is required.

24 years.

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

Step: 3

blur-text-image

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

A Study In Public Finance

Authors: A. C. Pigou

1st Edition

1443722766, 978-1443722766

More Books

Students also viewed these Finance questions

Question

=+P* fails to agree with P on 70 and explain why.

Answered: 1 week ago

Question

Why We Form Relationships Managing Relationship Dynamics?

Answered: 1 week ago