What should be the current stock price

Assignment Help Financial Management

Reference no: EM131027171

1. Miller's Farm has 120,000 shares of stock outstanding, sales of $850,000, and net income of $55,000. Financial analysts believe the price-earnings ratio for this firm should be 15.8. Given this information, what should be the current stock price?

A. $7.24 B. $8.87 C. $14.85 D. $14.57 E. $15.21

2. Leslie Apparel has a current book value per share of $5.15 and current earnings per share of $1.13. The required return is 14 percent and the expected earnings growth rate is 4.5 percent. What is one share of this stock worth today?

A. $7.44

B. $8.77

C. $9.99

D. $10.65

E. $11.13

3. Ultra Fine Furnishings is in the process of selling its peripheral businesses and focusing on its upscale clients. In conjunction with this reorganization, the dividend will be decreased by 10 percent for the next three years. After that, the dividend will resume increasing at an annual rate of 5 percent. The required return on this stock is 14 percent and the last dividend paid was $2.40 a share. What is one share of this stock worth today?

A. $17.34

B. $18.08

C. $18.35

D. $19.68

E. $20.72

4. Wilkinson and Daughters has net income of $415,400, total assets of $2.2 million, and total liabilities of $1.08 million. The company paid $270,000 in dividends. What is the firm's sustainable rate of growth?

A. 9.69 percent

B. 11.06 percent

C. 12.98 percent

D. 13.93 percent

E. 14.15 percent

5. The common stock of JL Recyclers has a required return of 12 percent and a current value of $18.72. The company pays its dividend annually and increases the amount by 4 percent each year. You own 300 shares of this stock. What was the total amount of the last dividend you received?

A. $319

B. $360

C. $432

D. $480

E. $513

6. A stock sells for $12.36 a share and has a required return of 9 percent. Dividends are paid annually and increase at a constant 3 percent per year. What is the amount of the last dividend paid?

A. $0.46

B. $0.50

C. $0.59

D. $0.63

E. $0.72

Reference no: EM131027171

Questions Cloud

Depreciated over five-year macrs property for tax purposes : RightPrice Investors, Inc. is considering the purchase of a $415,000 computer with an economic life of five years. The computer will be fully depreciated over five-year MACRS property for tax purposes. The market vaule of the computer of the computer..

Level of accounts receivable to support this sales expansion : Henderson Office Supply is considering a more liberal credit policy to increase sales, but expects that 9 percent of the new accounts will be uncollectible. What is the level of accounts receivable to support this sales expansion? What would be Hende..

What is the total cost of ordering and carrying inventory : Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $2 per order, and carrying costs of $1.60 per unit. Wha..

Requirements for reformulated gasoline : In the early 1990s, the California Air Resources Board (CARB) started planning its “Phase 2” requirements for reformulated gasoline (RFG). RFG is gasoline blended to tight specifications designed to reduce pollution from motor vehicles. CARB consulte..

What should be the current stock price : Miller's Farm has 120,000 shares of stock outstanding, sales of $850,000, and net income of $55,000. Financial analysts believe the price-earnings ratio for this firm should be 15.8. Given this information, what should be the current stock price? Les..

Present value of payoff-when product is brought to market : Ang Electronics, Inc., has developed a new DVDR. If the DVDR is successful, the present value of the payoff (when the product is brought to market) is $34.3 million. If the DVDR fails, the present value of the payoff is $12.3 million. Calculate the N..

Straight-line depreciation to zero over the four-year life : Consider a four-year project with the following information: Initial fixed asset investment = $460,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $28; variable costs = $18; fixed costs = $150,000; quantit..

Establishment of local collection centers around the country : Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by three ..

Diagram showing cash flows from your perspective as lender : Consider the following problem. You lend your friend $10 today, which s/he promises to repay you in two instalments of $5.25 each. The first instalment is to be paid in two weeks from today; and the second—in four weeks from today. Sketch a diagram s..

User Account

All Pages