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Q1,2,3 Listed above to assist in answering Q4 QUESTION 3 (Q2-Q4) Company B expects to pay a dividend of $12 next year, which they expect
Q1,2,3 Listed above to assist in answering Q4
QUESTION 3 (Q2-Q4) Company B expects to pay a dividend of $12 next year, which they expect to grow at 3% per year. The beta for company is 1.5, the risk-free rate is 2%, and the market risk premium is 4%. What is the price for one share of stock? $160 O $63.6 O $240 O $87.5 QUESTION 1 A firm has debt valued at $3 million, and $0.5 million in excess cash. The equity holders will receive dividends of $0.1 million next year, and this amount will grow by 4% in perpetuity. If the discount rate for the equity is 20%, what is the enterprise value of the firm? O $3.125 M O $3.625 M O $0.625 M O $4.125 M 10 points Save Answer QUESTION 2 (Q2 - Q4 are a set) Company B issues an annual coupon bond with face value of $1,000, YTM of 10%, a coupon rate of 5%, and 7 years to maturity. What is the price of this bond? O $756.58 O $1350 O $863.16 O $1289.32 QUESTION 4 (Q2-Q4) In addition to the information in 2 and 3. We know that Company B issued 8,000 bonds (Q2) and has 86,000 shares of stock (Q3). If company B has $30 million in cash, what is the Enterprise Value of company B? (Answer in millions. EX $2,300,000, put 2.3)Step by Step Solution
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