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Value a firm which is growing fairly fast now (abnormal growth) but will begin reaching maturity and a correspondingly lower earnings growth rate shortly. You've decided that a three-stage dividend discount model fits your needs perfectly for this firm. Using the information below, calculate the present value of this firm. Earnings last year = $1.50 per share Dividends last year = $0.15 ROE last year = 20% growth = retention rate x ROE You expect earnings growth, dividend payout and ROE to be stable over the next five years. At that time we will see the firm slow its earnings growth, increase its dividend payout, and reduce its cost of equity over the next five years. The long-term Treasury rate is 4%, the firm's current beta is 1.7, but you expect the long-term beta to fall to 1.0 by the end of your phase down period and the market risk premium is 6%. Long-term earnings are expected to grow at 3% to perpetuity and firm should be able to maintain a constant ROE of 6% for perpetuity. What is the present value of this firm's equity using the three-stage dividend discount model?
suppose an mnc is considering investing in bolivia. will an overall assessment of bolivias country risk suffice to
what are some of the primary advantages when a corporation has operations in countries other than its home country?
heleveton industries is 100 equity financed. its current beta is 1.1. the expected market risk premium is 8.5 and the
Assume both securities (the one that paid out on even digits and the one that paid out on odd digits) trade in the market today. Would that affect your answers?
Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7% of the market price. The company currently pays a $2.10 cash dividend and has a 6% growth rate. What are the costs of retained earnings and new common s..
K-Henry's Dull Diner has a contribution margin ratio of 16%. If fixed costs are $176,800, how many dollars of revenue must K-Henry's generate in order to reach the break-even point?
1.briefly describe your company and then benchmark the codes of conduct used by similar companies in the industry.
florida power amp light fpampl is the primary subsidiary of florida power amp light group representing 84 of their
francis inc.s stock has a required rate of return of 10.25 and it sells for 57.50 per share. the dividend is expected
donaldson amp son has an roa of 10 a 2 profit margin and a return on equity equal to 15. what is the companys total
which ratios measure a corporationrsquos liquidity? what are some of the problems associated with using financial
In what ways is preferred stock similar to long-term debt? In what ways is it similar to common stock?
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