Reference no: EM13919466
Cost of Equity
The earnings, dividends, and common stock price of Shelby Inc. are expected to grow at 4% per year in the future. Shelby's common stock sells for $26.25 per share, its last dividend was $1.50, and the company will pay a dividend of $1.56 at the end of the current year.
Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places.
%
If the firm's beta is 1.9, the risk-free rate is 5%, and the expected return on the market is 12%, then what would be the firm's cost of equity based on the CAPM approach? Round your answer to two decimal places.
%
If the firm's bonds earn a return of 11%, and analysts estimate the market risk premium is 3 to 5 percent, then what would be your estimate of rs using the over-own-bond-yield-plus-judgmental-risk-premium approach? Round your answer to two decimal places. (Hint: Use the midpoint of the risk premium range).
%
On the basis of the results of parts a through c, what would be your estimate of Shelby's cost of equity? Assume Shelby values each approach equally. Round your answer to two decimal places.
%
|
Calculate the projected cash flows from this project
: The Bogart Company, originally established 77 years ago to make baseballs, is now a leading producer of tennis balls, baseballs, footballs, and golf balls. Eleven years ago, the company introduced “Speed Flight”, its first line of high-performance te..
|
|
Manova is the method of analysis
: MANOVA is the method of analysis that A) Uses several independent variables to predict the category to which a participant belongs B) Describes the relationship between a predictor and an outcome variable C) Describes the effect of an independent var..
|
|
Difference between net cash provided by operating activities
: Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability.
|
|
The annually compounded rate of return misty needs
: Misty needs to have 16000 at the end of 6 years to fulfill her goal of purchasing a small sailboat . She is willing to invest a lump sum today and leave the money untouched for 6 years until it grows to 16000. the annually compounded rate of return m..
|
|
Using discounted cash flow approach-what is cost of equity
: The earnings, dividends, and common stock price of Shelby Inc. are expected to grow at 4% per year in the future. Shelby's common stock sells for $26.25 per share, its last dividend was $1.50, and the company will pay a dividend of $1.56 at the end o..
|
|
Behaviorist of cognitivist
: Why do cognitivists disagree with the behaviorist view that learning only occurs if there is an outward manifestation? What are the implications to the behavior(s) it identifies?
|
|
Random variable with moment generating function
: Suppose X is a random variable with moment generating function,(a) Is X continuous or discrete? Justify our assertion.
|
|
The manufacturers of this product lobby
: A doctoral student has just completed a study for her dissertation and found the following demand and supply schedules for hand held computers to be as follows:
|
|
Financial statement analysis and report writing
: Describe and evaluate the company's business strategy. Do you think it is viable? Why did the attempt to purchase the company in late 2013 fail? How productive were the company's mines in 2013? What metrics are you using?
|