Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Rand Co.'s current rate of return (ROE) is 14%. It pays out(payout ratio) half of its earnings as dividends. Current book value is $50 per share. Book value per share will grow as Rand reinvests earnings.
Assume ROE and payout ratio stay the same for the next 4 years. After that competition forces ROE down to 11.5% and payout increases to .8. The cost of capital is 11.5%
a. What are Rand's EPS and dividends next year? How will EPS and dividends grow in years 2, 3, 4, and 5 in subsequent years?
b. What is Rand's stock worth per share? How does that value depend on the payout ratio and growth rate after year 4?
Include formulas used to calculate EPS and dividends as well as stock worth per share. Please answer part b question - "How does that value depend on the payout ratio and growth rate after year 4?"
If your tax rate is 40 percent and you require a 11 percent return on your investment, what bid price per carton should you submit?
Some firms prefer to use debt or preferred stock for financing to retain control. Explain the rationale behind this method.
Using straight line depreciation, calculate depreciation expense for the first year.
The additional net working capital from this project of $50,000 is expected to return to its pre-project level upon termination. What is the non-operating terminal cash flow of the machine?
Siebling Manufacturing Corporations's common stock has a beta of .8. If the expected risk-free return is 7 percent and the market offers a premium of 8% over the risk-free rate,
After that time, the dividends will be held constant at $1.60 per share. What is this stock worth today at a 9 percent discount rate?
Your firm is a U.S.-based exporter of toys. You have sold an order to an Italian firm for €1,000,000 worth of toys. Payment from the Italian firm (in €) is due in 1 year.
Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $25,000, and that it has a 25 percent tax bracket. What are the after-tax cash flows for the company?
What are the principle causes and possible cures of disintermediation in the finance industry? What new forms of disintermediation have appeared in recent years?
What would make for a larger increase in the stock's variance: an increase of .15 in its beta or an increase of 3% in its residual standard deviation?
Under current law, if your capital losses exceed your capital gains, you can deduct as much as $3,000 of losses against other forms of income. In the wake of massive declines in the stock market, in 2009 Senator Orrin Hatch suggested that figure be i..
What's the taxable equivalent yield on a municipal bond with a yield to maturity of 8.50 percent for an investor in the 28 percent marginal tax bracket? (Round your answer to 2 decimal places.)
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd