The company expects to have earnings per share

Assignment Help Financial Management
Reference no: EM131185235

The Sharpe Co. just paid a dividend of $1.70 per share of stock. Its target payout ratio is 40 percent. The company expects to have an earnings per share of $4.85 one year from now. a.

a) If the adjustment rate is .6 as defined in the Lintner model, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Dividend_____?

b) If the adjustment rate is .9 instead, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Dividend_____?

Reference no: EM131185235

Questions Cloud

What are the incremental free cash flows associated : Daily enterprise is purchasing a $10.2 million machine. It will cost $47,000 to transport and install the machine. The machine has a depreciation life of five years using straight line depreciation and will have no salvage value. What are the increme..
Asset management and debt management ratios : Asset Management and Debt Management Ratios Use the following information to complete the following balance sheet. Sales are $8.8 million, capital intensity ratio is 2.10 times, debt ratio is 55 percent, and fixed asset turnover is 1.2 times.
Calculate the market-to-book ratio and pe ratio. : Market Value Ratios You are considering an investment in Roxie’s Bed & Breakfast Corp. During the last year, the firm’s income statement listed an addition to retained earnings of $4.8 million and common stock dividends of $2.2 million. Calculate the..
Prepare an income statement : Use the following information for Ingersoll, Inc., (assume the tax rate is 40 percent): 2014 2015 Sales $ 9,035 $ 9,609 Depreciation 1,245 1,246 Cost of goods sold 2,816 3,180 Other expenses 759 654 Interest 645 723, Prepare an income statement for t..
The company expects to have earnings per share : The Sharpe Co. just paid a dividend of $1.70 per share of stock. Its target payout ratio is 40 percent. The company expects to have an earnings per share of $4.85 one year from now. a. If the adjustment rate is .6 as defined in the Lintner model, wha..
When determining profitability of individual product lines : The president of Cold Moo Ice Cream Company, a chain of ice cream stores in the Midwest, was unhappy with the actual six-month profit figures for the company recently prepared by the CFO. The president asked the CFO for a profit breakdown, by store, ..
What is the company total asset turnover and profit margin : The Dahlia Company has net income of $157,850. There are currently 28.65 days’ sales in receivables. Total assets are $846,000, total receivables are $147,100, and the debt–equity ratio is .35. What is the company’s profit margin? What is the company..
Ow much was crispys stockholders equity : A company has 74,000 in assists and 23,000 in liabilities.How much does the company have in stockholders' equity?2) A company has 63,000 in assests and 14,000 of stockholdrs' equity.How much does the company have in liabilities?3)A company has 82,000..
What will be the price of the stock on the ex-dividend date : The Mann Company belongs to a risk class for which the appropriate discount rate is 13 percent. Mann currently has 228,000 outstanding shares selling at $126 each. What will be the price of the stock on the ex-dividend date if the dividend is declare..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Stock has an expected return

A stock has an expected return of 12.2 percent, the risk-free rate is 4 percent, and the market risk premium is 10 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your final answer to 2 decimal places. ..

  What is the worth of this deal to the player

In 2011, a running back signed a contract worth $58.8 million. The contract called for $10 million immediately and a salary of $3 million in 2011, $8.5 million in 2012, $10 million in 2013, $8.9 million in 2014 and 2015, and $9.5 million in 2016. If ..

  How much is this investment worth today

A preferred stock investment will pay you an annual $8 dividend on the same day each year. The dividends will begin 9 years from today and go on forever. How much is this investment worth today if the required rate is 10%?

  Borrower to pay two points to lender up front-repay loan

You are looking at a one-year loan of $15,000. The interest rate is quoted as 10.0 percent plus two points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. Th..

  About the highest future value

At the end of 10 years, which of the following investments would have the highest future value? Assume that the effective annual rate for all investments is the same and is greater than zero.

  Between annual sales of bobcat industries

Between December 31, 2016 and December 31, 2017, annual sales of Bobcat Industries went from $32,000,000 to $48,000,000. EBIT went from $3,000,000 to $4,600,000. Net income went from $1,500,000 to $2,200,000. Management has asked you to comment

  Using the dividend capitalization model approach

The following financial information is available on Rawls Manufacturing Company: Rawls can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital using the dividend capitalization model approach. (compu..

  What is the value and discount rate

What is the value today of $5,000 per year, at a discount rate of 9 percent, if the first payment is received 5 years from today and the last payment is received 15 years from today?

  Problem related to the capital expenditure budget

If you were assigned to prepare a capital expenditure budget request to add a retail pharmacy in the hospital, which two individuals from your department(s) would you want to have on your team to help you?

  Price and yield

An 8% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 8.2123%. What is the bond's price? What is the bond's YTM?

  What is its times-interest-earned ratio

Britton Industries has operating income for the year of $3,600,000 and a 35% tax rate. Its total invested capital is $18,000,000 and its after-tax percentage cost of capital is 7%. What is the firm’s EVA? Graser Trucking has $22 billion in assets, an..

  Approximate the before tax cost

Approximate the before tax cost using the following

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd