Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This is one question (from Q8 to Q18) i need answers from Q13 to Q18 (please answers all questions) Question 8 6 pts The market

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

This is one question (from Q8 to Q18) i need answers from Q13 to Q18 (please answers all questions)

Question 8 6 pts The market consensus is that Analog Electronic Corporation has an ROE = 9% and a beta of 2.05. It plans to maintain indefinitely its traditional plowback ratio of 1/3. This year's earnings were $3.8 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 11.6 Question 9 6 pts = The market consensus is that Analog Electronic Corporation has an ROE = 9% and a beta of 2.05. It plans to maintain indefinitely its traditional plowback ratio of 1/3. This year's earnings were $3.8 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 2/3. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 6.88 Question 10 5 pts The stock of Nogro Corporation is currently selling for $20 per share. Earnings per share in the coming year are expected to be $4. The company has a policy of paying out a fraction of 0.5 of its earnings each year in dividends. The rest is retained and invested in projects that earn an ROE of 20%. This situation is expected to continue indefinitely. 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. Enter the answer as a decimal rounded to 2 decimal places.) 0.2 Question 11 4 pts The stock of Nogro Corporation is currently selling for $20 per share. Earnings per share in the coming year are expected to be $4. The company has a policy of paying out a fraction of 0.5 of its earnings each year in dividends. The rest is retained and invested in projects that earn an ROE of 20%. This situation is expected to continue indefinitely. By how much does its value exceed what it would be if all earnings were paid as dividends and nothing were reinvested, i.e., what is the PVGO? (Do not round intermediate calculations. Enter the answer as a numerical number rounded to 2 decimal places.) 0 D Question 12 3 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Calculate the required rate of return for SmileWhite using the information in the following table: December 2010 Quick Brush SmileWhite Beta 1.35 1.2 Market Price $45 $30 Intrinsic Value $63 ? Note: Risk free rate = 4%; expected market return = 14.5% Instruction: enter your answer as a decimal rounded to 4 decimal place. 0.16 Question 13 2 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the dividend value of SmileWhite in 2011 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. Year Dividends 2010 $1.00 2011 ??? Question 14 2 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the dividend value of SmileWhite in 2012 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. You may use the results obtained in Question 8-13 Year Dividends 2010 $1.00 2011 From Question 8-13 2012 222 D Question 15 2 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the dividend value of SmileWhite in 2013 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. You may use the results obtained in Question 8-13 and 8-14. Year Dividends 2010 $1.00 2011 From Question 8-13 2012 From Question 8-14 2013 ??? Question 16 3 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the dividend value of SmileWhite in 2014 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. You may use the results obtained in Question 8-13, 8-14, and 8-15. Year Dividends 2010 $1.00 2011 From Question 8-13 2012 From Question 8-14 2013 From Question 8-15 2014 ??? Question 17 5 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the intrinsic value of SmileWhite in December 2013 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. You may use the results obtained in the previous Questions 8-13, 8- 14, 8-15, and 8-16. Year Dividends 2010 $1.00 2011 From Question 8-13 2012 From Question 8-14 2013 From Question 8-15 From Question 8-16 2014 D Question 18 5 pts Janet Ludlow's firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation. Ludlow estimates the following EPS and dividend growth rate for SmileWhite: First Three years: 15% per year Years thereafter: 12% per year Estimate the intrinsic value of SmileWhite in December 2010 using the table above and the two-stage DDM. Dividends per share in 2010 were $1. Instruction: enter your answer as a decimal number rounded to 2 decimal places. You may use the results obtained in the previous Questions 8-13, 8- 14, 8-15, 8-16, and 8-17. Year Dividends 2010 $1.00 2011 From Question 8-13 2012 From Question 8-14 2013 From Question 8-15 2014 From Question 8-16

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_2

Step: 3

blur-text-image_3

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

Investments

Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey

6th Edition

8120321014, 978-8120321014

More Books

Students also viewed these Finance questions