Required: Elk City Utility recently paid a dividend of $3.77 per share. Dividends are expected to grow at a rate of 3.90%. Elk City stock currently sells for $38.20 per sha. If you were on the utility regulatory commission, what rate of return would you allow Elk City to earn? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Rate of return % Required: A firm pays a current dividend of $2, which is expected to grow at a rate of 9% indefinitely. If the current value of the firm's shares is $218, what is the required return applicable to the investment based on the constant-growth dividend discount model (DDM)? (Do not round intermediate calculations.) Required rate of retur Required: Jand, Incorporate currently pays a dividend of $1.48, which is expected to grow indefinitely at 6%. If the current value of Jand's shares based on the constant-growth dividend discount model is $39.16, what is the required rate of return? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Required rate of return % SOLEN Ins Required: Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 22% for two years and then at 5% thereafter. If the required rern for Deployment Specialists is 11.0%, what is the intrinsic value of its stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Intrinsic value The stock of Nogro Corporation is currently selling for $40 per share. Earnings per share in the coming year are expected to be $6. The company has policy of paying out 40% of its earnings each year in dividends. The rest is retained and invested in projects that earn a 15% rate of return per year. This situation is expected to continue Indefinitely. Required: a. Assuming the current market price of the stock reflects its intrinsic value as computed using the constant-growth DDM, what rate of return do Nogro's investors require? (Do not round intermediate calculations.) Rate of return b. By how much does its value exceed what it would be if all earnings were paid as dividends and nothing was reinvested? PVGO c. If Nogro were to cut its dividend payout ratio to 25%, what would happen to its stock price? O Stock price would be decreased O Stock price would be increased O Stock price would be unaffected d. If Nogro eliminated the dividend, what would happen to its stock price? Stock price would be decreased Stock price would be increased Stock price would be unaffected Required: A firm has current assets that could be sold for their book value of $44 million. The book value of its fixed assets is $82 million, but they could be sold for $112 million today. The firm has total debt with a book value of $62 million, but interest rate declines have caused the market lue of the debt to increase to $72 million. What is this firm's market-to-book ratio? (Round your answer to 2 decimal places.) Market-to-book ratio Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.30. Its earnings this year will be $2 per share. Investors expect a 11% rate of return on the stock. Required: a. At what price and P/E ratio would you expect the firm to sell? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price P/E ratio b. What is the present value of growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.) PVGO c. What would be the P/E ratio and the present value of growth opportunities if the firm planned to reinvest only 25% of its earnings, (Do not round intermediate calculations. Round your answers to 2 decimal places.) P/E ratio PVGO Required: Jand, Incorporated, currently pays a dividend of $1.22, which is expected to grow indefinitely at 5%. If the current value of Jand's shares based on the constant-growth dividend discount model is $32.03, what is the required rate of return? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Required rate of return CD Bargain Barn forecasting earnings per share of $3.15 next year. Its investors require a return of 14.5%. Required: a. What is the no-growth value of CD's stock? (Round your answer to 3 decimal places.) No-growth value h b. If the stock's price is currently $38, what is the present value of growth opportunities (PVGO)? (Round your answer to 3 decimal places.) PVGO c. What is the implied P/E ratio for CD's stock? (Round your answer to 2 decimal places.) Implied P/E ratio 00:00