Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stock assignment 3 Using two companies you chose for your 1st assignment, you should answer the following questions. Please make sure that you should show

Stock assignment 3

Using two companies you chose for your 1st assignment, you should answer the following questions. Please make sure that you should show your work to earn credit.

1. Using the past dividend payout information between 2016 and 2020, compute the growth rate (g) for these companies. Your companies must have a complete history of dividend payout during these periods. You can find such information atwww.dividendinformation.com. If your company lacks the dividend payout information, you need to select a new company (40 points). 2. First, lets assume that the required return (R) is 10% for all these companies. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of these companies. Second, lets assume that the required return (R) is 20% for all these companies. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of these companies (40 points). 3. Compare your estimated stock prices with actual stock prices as of January 4, 2021. Then tell me whether each stock is undervalued or fairly-valued or overvalued based on your estimation. Whats your decision if you hold these stocks? Whats your decision if you dont hold these stocks? (20 points)

The names of the two companies I chose were Bank of Nova Scotia and Newtek Business Services Corp

Bank of Nova Scotia is one of North America's premier financial institutions and Canada's most international bank. They offer a diverse range of products and services including personal, commercial, corporate and investment banking. Scotiabank has built long-term value and recorded consistent earnings growth by building on its core strengths and by executing exceptionally well in its core businesses. These include Domestic Banking, Wealth Management, International Banking and Scotia Capital.

Last update 09/20/2021Top Dividend Paying Stock

Dividend Yield Summary

2016

2017

2018

2019

2020

2021

Ticker

Company Name

Dividend yield (current year)

BNS

Bank Of Nova Scotia

5.77%

Dividends

2.22

3.33

3.34

3.51

3.60

2.70

Average Price

53.10

60.90

58.95

54.68

44.94

61.80

Yield

4.18%

5.47%

5.67%

6.42%

8.01%

4.37%

The above Dividend, Average Price, and Yield values for 2021 are year-to-date.

Dividend Dates

Ex Dividend Date

2021-07-02

Dividend Pay Date

2021-10-27

DivInfo Metrics

52-Week Projected Earnings Per Share

5.60

52-Week Projected Dividends Per Share

3.54

Dividend Cover

1.58 : 1

52-Week Projected Yield

5.77%

52-Week Trailing Yield

6.28%

6-Year Average Yield

5.59%

6-Year Dividend Change

59.46%

6-Year Yearly Dividend Change

9.91%

Number of Dividend Payments (2003-01-03 - 2021-07-05)

75

Dividend History

Dividend HistoryDPS2003-02004-02005-12007-02009-02011-02013-02014-02015-12017-02018-02019-02021-00.00.51.0

Newtek Business Services Corp provides business services. Its services include financial, payroll, payment, technology and insurance solutions. It is also involved in investments in early stage companies.Reliable Dividend Paying Stock

Ticker

Company Name

Dividend yield (min last 6 years)

NEWT

Newtek Business Services Corp

9.25%

Last update 09/20/2021Dividend Yield Summary

2016

2017

2018

2019

2020

2021

Dividends

1.93

1.64

1.80

2.15

2.05

2.10

Average Price

12.66

16.74

19.46

21.51

17.89

28.28

Yield

15.25%

9.80%

9.25%

10.00%

11.46%

7.42%

The above Dividend, Average Price, and Yield values for 2021 are year-to-date.

Dividend Dates

Ex Dividend Date

2021-09-17

Dividend Pay Date

DivInfo Metrics

52-Week Projected Earnings Per Share

2.87

52-Week Projected Dividends Per Share

2.49

Dividend Cover

1.15 : 1

52-Week Projected Yield

9.24%

52-Week Trailing Yield

10.18%

6-Year Average Yield

10.01%

6-Year Dividend Change

29.02%

6-Year Yearly Dividend Change

4.84%

Number of Dividend Payments (2009-12-08 - 2021-09-17)

29

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

Telecom Audit

Authors: M S. Mastel

1st Edition

0071410546, 9780071410540

More Books

Students also viewed these Accounting questions