Question
Please show your work for support 1. Assume that Summa Corporation is currently paying $1.01 per share in dividends to grow at the rate of
Please show your work for support
1. Assume that Summa Corporation is currently paying $1.01 per share in dividends to grow at the rate of 0.08% a year for the foreseeable future. For investments at this risk level, investors require a return of 0.1% a year. Find the estimated value of Summa
2. The Parker Dental Supply Company sells at $27 per share, and Ray Parker, the CEO of this well-known Research Triangle firm, estimates that the latest 12-month earnings are $8 per share with a dividend payout of 50%. Dr.Parkers earnings estimates are very accurate. What is Parkers current P/E ratio?
3. Buck Software Products is currently paying a dividend of $1.25. This dividend is expected to grow at the rate of 25 percent a year for the next five years, followed by a growth rate of 15 percent a year for the following five years. After 10 years, the dividend is expected to grow at the rate of 6 percent a year. The required rate of return for this stock is 18 percent. What is its intrinsic value?
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