Suurt 1. value 20.00 points Pharmecology just paid an annual dividend of $2.10 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 4.00% per year. The nominal cost of capital is 10.75% a. What is Pharmecology's current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price S b. What would be Pharmecology's current stock price using forecasted real dividends and a real discount rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current stock price $ References eBook & Resources Worksheet Difficulty Intermediate Check my work 9:15 PM save & Exit Submit 2. value 20.00 points Company Q's current return on equity (ROE) is 16%. The firm pays out 60 percent of its earnings as cash dividends (payout ratio = 60). Current book value per share is $52. Book value per share will grow as Q reinvests earnings Assume that the ROE and payout ratio stay constant for the next four years After that competition forces ROE down to 125% and the payout ratio increases to 90 The cost of capital is 12.5% a. What are Q's EPS and dividends in years 1, 2, 3, 4, and 57 (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year EPS Dividends b. What is Q's stock worth per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock worth per share References eBook & Resources 49:34 PM 5 6 7 * 8 9 0 TERTI YUTO K value: 20.00 points Permian Partners (PP) produces from aging oil fields in west Texas Production is 1 84 million barrels per year in 2016, but production is declining at 5% per year for the foreseeable future. Costs of production, transportation, and administration add up to $25.40 per barrel. The average oil price was $65.40 per barrel in 2016. PP has 7.4 million shares outstanding. The cost of capital is 7%. All of PP's net income is distributed as dividends For simplicity, assume that the company will stay in business forever and that costs per barrel are constant at $25.40. Also, ignore taxes a. Assume that oil prices are expected to fall to $60.40 per barrel in 2017, $55.40 per barrel in 2018, and $50.40 per barrel in 2019. After 2019, assume a long-term trend of oil price increases at 3% per year. What is the ending 2016 value of one PP share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share value 2016 b-1. What is PP's EPS/P ratio? (Do not round intermediate calculations. Round your answer to 3 decimal places.) EPS/P ratio b-2. Is it equal to the 7% cost of capital? Yes No References eBook & Resources 9:14 PM