$5.00 FIN 200 Checkpoint Stock Valuations With Teachers Comment and grade 30/30
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- Posted on Oct 17, 2008 at 01:24:01PM
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Preview: ... ade 30/30<br><br>Make sure that you d ...
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$25.00 ALL ASSIGNMENTS, DISCUSSION QUESTIONS AND FINAL FINN/200
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- Posted on Oct 24, 2008 at 11:23:42PM
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$5.00 NEWLY UPDATED: PLEASE REMEMBER TO REFORMAT THAT IS WHY PEOPLE ARE COMPLAINING.. THEY ARE THE TEACHER ANSWER KEY
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- Posted on Nov 04, 2008 at 10:36:37PM
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Preview: ... 4716/(.20 - .132) = $21.64<br> <br><br>5. P0 = D/ke<br> = $2.00/0.16<br> = $12.50<br><br>6. a. PV0 = $2.00; FV6 = $4.00; n = 6<br> Using the calculator the interest rate = g = 12.2%<br> b. P0 = D1/(ke - g)<br> g = 12.2% D0 = $2.00 ke = .18<br> Dl = D0(1 + g) = 2.00(1 + 0.122) = $2.24<br> P0 = 2.24/(0.18 0.122) = $38.62<br>c. The constant growth model used above assumes that dividends will grow at 12.2% per year indefinitely. To the extent that assumption is violated the price obtained above may not be accurate. <br><br>7. ke = D1/P0 + g<br> 0.14 = 1.25/32 + g <br> g = 0.1009 (or 10.09%)<br><br>8. P0 = (appropriate PE multiple) x (forecasted earnings per share)<br> = 12 x $2.25<br> = $27.00 <br> Since the quoted price of $28.00 is greater than the computed value of the stock, Lavonne should not buy Piedmont stock.<br><br>9. Book value per share is calculated as common stockholders equity divided by common shares outstanding. <br> Common shares outstanding = common stock par value / par value per share<br> = $10,505,000 / $1.00<br> = 10,505,000 shares outstanding<br>Book value per share = common stockholders equity / common shares outstanding<br> = $57,335,000 / 10,505,000<br> = $5.46<br><br>10. P0 = Dp/kp<br> = $2.50 / 0.09<br> = $27.77<br> Jennifer should not invest in this stock because it is overvaluedselling price of the stock is greater than the computed value.<br> <br><br>11. Required rate of return for Kummins using the Security Market Line equation:<br> k = 5 + 0.9 (8)<br> = 12.2%<br> The value of Kummins ...
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$4.25 Detailed Answers. Work Shown. A+
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- Posted on Jan 14, 2009 at 11:20:59PM
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Preview: ... y of 5-6%.<br><br>14. a. The dividend yields on the three stocks are as follows:<br>Office Depot: 0% (Office Depot does not pay any dividends)<br>Public Service Enterprises: 4.7%<br>Sara Lee: 2.7%<br>b. There are many reasons dividends yields vary across firms and one of them is growth. High growth firms typically pay no or low dividends preferring instead to retain the earnings for reinvesting in profitable projects. Low growth firms on the other hand may choose to disburse the earnings to their shareholders since they do not need the cash for reinvestment purposes. In this case Office Depot has a zero dividend yield probably because it is a high growth firm that can profitably reinvest its earnings. At the other extreme Public Service Enterprises operates in the mature and stable utility industry and may not have significant cash needs for reinvestment purposes and can therefore afford a more generous dividend policy resulting in a higher dividend yield.<br>c. Price-Earnings ratios:<br>Phillip Morris: 14x<br>Office Depot: 30x<br>d. Office Depots higher PE ratio compared to Phillip Morris is likely due to the higher growth prospects for Office Depot compared to Phillip Morris. <br><br>15. a. k = 7 + 1.5 (14 - 7)<br>= 17.5 %<br>P0 = [$3.00(1.06)]/(0.175 - 0.06)<br>= $27.65<br>b. k = 6 + 1.5 (14 - 6)<br>= 18 %<br>P0 = [$3.00(1.06)]/(0.18 - 0.06)<br>= $26.5<br>c. k = 7 + 1.6 (14 - 7)<br>= 18.2 %<br>P0 = [$3.00(1.07)]/(0.182 - 0.07)<br>= $28.66<br>The acquisition appears to be ...
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$3.75 Work shown in simple clear detail. A+ on assignment
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- Posted on Jan 21, 2009 at 10:08:12PM
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Preview: ... t Recent Dividend. 5, Rate of return 16, expected growth rate 6=$53.00 <br><br>2d. The value of a share of common stock to investors with a 6% required rate of return would not be able to be answered the required rate of return would have to be greater than what the expected growth rate would be for this stock.<br><br ...
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$4.00 Stock Valuations-all answers with work-A+
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- Posted on Feb 11, 2009 at 4:03:16PM
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Preview: ... ancial analysts that he expects the firms earnings and dividends to double over the next 6 years. The firms current (that is, as of year 0) earnings and dividends per share are $4 and $2, respectively.<br>a. Estimate the compound annual dividend growth rate over the 6-year period.<br>PV0 = $2.00; FV6 = $4.00; n = 6, interest rate = 12.2%<br>b. Assuming the forecasted growth rate in (a) will go on forever, how much is this stock worth today if investors require an 18 percent rate of return?<br>P0 = D1/(ke - g), g =12.2%, D0 = $2.00, ke = .18<br>Dl = D0(1 + g) = 2.00(1 + 0.122) = $2.24<br>P0 = 2.24/(0.18 0.122) = $38.62<br>c. Why might the stock price calculated in (b) not represent an accurate valuation to an investor with an 18 percent required rate of return? The constant growth model assumes the rate of growth will always be 12.2%. It is most likely going to change from year to year. <br><br>9. Calculate the book value per shar ...
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$5.00 AXIA College FIN 200 Week Five Checkpoint A+ Work Guaranteed!! Detail Answers
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- Posted on Feb 18, 2009 at 6:53:38PM
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Preview: ... )<br> g = 0.07 D0 = $1.70 ke = .12<br> Dl = D0(1 + g) = 1.70(1 + 0.07) ...
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$2.99 Work shown in detail. All correct. A+
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Preview: ... expected growth rate 9=$61.77<br><br>1.C Inputs into calculator Most Recent Dividend. 1.7, Rate of return 12, expected growth rate 6.5=$32.92<br><br>2a Inputs into calculator Most Recent Dividend. 5, Rate of return 12, expected growth rate 6=$88.33<br><br>2B. Inputs into calculator Most Recent Dividend. 5, Rate of ...
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$4.50 FIN200 Week 8 Check Point A+
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- Posted on Jun 14, 2009 at 3:28:31PM
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Preview: ... s<br>Inventories* 800 (salaries and benefits) 300<br>Other current assets 200 Other current liabilities 700<br>Total current assets $3,400 Total current liabilities $1,900<br>Plant and equipment (net) 2,300 Long-term debt and other<br>Other assets 1,000 liabilities 1,000<br> Total assets $6,700 Common stock 1,800<br> Retained earnings 2,000<br> Total stockholders equity $3,800<br> Total liabilities & equity $6,700<br><br>*Assume that average inventory over the year was $800 million, that is, the same as ending inventory <br><br> Income Statement (in Millions of Dollars)<br><br> Net Sales $6,500<br> Cost of Sales 1,500<br> Selling, general, and administrative expenses 2,500<br> Other expenses 800<br> Total expenses $4,800<br> Earnings before taxes 1,700<br> Taxes 680<br> Earnings after taxes (net income) $1,020<br><br>a. Determine Hopewells cash conversion cycle.<br> Operating cycle = 194.7 days + 73.0 days = 267.7 days<br>Payables deferral period = ($900 + $300)/[($1,500 + $2,500)/365] <br>= 109.5 days<br>Cash conversion cycle = 267.7 days -109.5 days =158.2 days<br><br>b. Give ...
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