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Computer stocks currently provide an expected rate of return of 18%. MBI, a large computer company, will pay a year-end dividend of $2.30 per share.   a. If the stock is selling at $53 per share, what must be the market's expectation of the dividend growth rate? (Round your answer to 2 decimal places.) b. If dividend growth forecasts for MBI are revised downward to 7% per year, what will happen to the price of MBI stock?   A. The price will fall. B. The price will rise.   c. What (qualitatively) will happen to the company's price–earnings ratio?   A. The price–earnings ratio will fall. B. The price–earnings ratio will rise.

Assume that the 10-year U.S. Treasury is yielding 4.0 percent. Next year's earnings for the S&P 500 are expected to be $120. Use the Fed model to estimate the value of the S&P 500. Do not round intermediate calculations. Round your answer to two decimal places. If the S&P 500 is trading at 2,650, is the market overvalued or undervalued, and by how much? Do not round intermediate calculations. Round your answer to two decimal places. The market is -Select- -Select- overvalued undervalued ✓by %.

The Japanese stock market bubble peaked at 54,000 in 1989. Two and a half years later it had fallen to 24,600. What was the percentage decline? (Negative answer should be indicated with a minus sign. Round your answer to 2 decima places.) Market decline %

Computer stocks currently provide an expected rate of return of 21%. MBI, a large computer company, will pay a year-end dividend of $3.00 per share. a. If the stock is selling at $60 per share, what must be the market's expectation of the dividend growth rate? (Round your answer to 2 decimal places.) Growth rate % b. If dividend growth forecasts for MBI are revised downward to 8% per year, what will happen to the price of MBI stock? O The price will rise. O The price will fall. c. What (qualitatively) will happen to the company's price-earnings ratio? O The price-earnings ratio will rise. O The price-earnings ratio will fall.

Please Solving Problem

Bhupatbhai

a. Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 per share. If the stock is selling at $50 per share, what must be the market’s expectation of the dividend growth rate?b. If dividend growth forecasts for MBI are revised downward to 5% per year, what will happen to the price of MBI stock?c. What (qualitatively) will happen to the company’s price–earnings ratio?

9. Computer stocks currently provide an expected rate of return of 16%. MBI, a large computer company, will pay a year-end dividend of $2 per share. a. If the stock is selling at $50 per share, what must be the market’s expectation of the growth rate of MBI dividends? b. If dividend growth forecasts for MBI are revised downward to 5% per year, what will happen to the price of MBI stock? What (qualitatively) will happen to the company’s P/E ratio?

2. You are an equity analyst examining a firm that is currently trading at $40/share. The consensus market estimates for EPS (Earnings Per Share) for the next three years are $2 next year and $3 the year after and $4 the year after that (year 3).  You believe these EPS estimates are accurate. Other similar firms trade at a P/E multiple of 12.5 with an expected average long term growth rate estimate starting today of 4%.  Assume all earnings are paid out in dividends. a. If you believe your stock reaches steady state and will grow from then like other similar firms today, would you recommend buying the shares at the current stock price?  b. After the first year once the dividend is paid, the stock price increases to $55 as it becomes known to everyone that the long term growth rate will actually be 1% more (5%). Ignoring tax issues, would you recommend buy, hold or sell of the stock at that time?

Vijay

You want to check if GRBH stock is fairly priced in the markets by using the fundamental analysis. For this purpose, you have gathered the following information: GRBH pays dividends once a year and the next dividend payment is expected to be made in one year. You project the EPS of the first and second year to be $5 and $7 respectively. The company dividend payout ratio is stable at 0.2. At the end of the second year, you assume that the company would become the average company in the industry. The industry average PE ratio is 8. You believe that the appropriate required rate of return on GRBH stock is 10% (CCR per annum). And the current market price of GRBH stock is $45.  ind the present value of GRBH stock based on the information above. Is the stock over- or under-priced?

A share of stock with a beta of .75 now sells for $50. The investors expect the stock to pay a year-end dividend of $2. The Treasury bill rate is 4%, and the market risk premium is 7%. If the stock price is perceived to be fair today, what must be the investors’ expectation for the price of the stock at the end of the year? [Hint: at what rate should the stock price change annually?]

Philadelphia Corporation's stock recently paid a dividend of $2.00 per share (D0 = $2), and the stock is in equilibrium. The company has a constant growth rate of 5 percent and a beta equal to 1.5. The required rate of return on the market is 15 percent, and the risk-free rate is 7 percent. Philadelphia is considering a change in policy which will increase its beta coefficient to 1.75. If market conditions remain unchanged, what new constant growth rate will cause the common stock price of Philadelphia to remain unchanged?

24) can i get help with this

Analysts believe that Manufactured Earnings is a “darling” of Wall Street analysts. Its current market price is $27 per share, and its book value is $11 per share. Analysts forecast that the firm’s book value will grow by 12.5 percent per year indefinitely, and the cost of equity is 17percent. Given these facts, what is the market’s expectation of the firm’s long-term average ROE?

(Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 2 3 4 5 Marsh $10 13 16 7 10 (Click on the icon in order to copy its contents into a spreadsheet.) a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Marsh's stock over this period? a. The annual rate of return at the end of year 2 is %. (Round to two decimal places.)

Please answer Question 8 & 9   8.On March 24, 2020, the Dow Jones Industrial Average opened at $18,591.93 and closed at $20,704.91. What was the daily return that day, and what was the effective annual rate return (in percent) of the stock market that day?Daily Return: __________% EAR:_________ %   9. Financial analysts forecast GDY Inc.’s growth for the future to be 8%. GDY's recent annual dividend was $6.00. What is the value of GDY stock when the required return is 11%?Stock Value: $___________________

Computer stocks currently provide an expected rate of return of 21%. MBI, a large computer company, will pay a year-end dividend of $3.00 per share. Required: If the stock is selling at $60 per share, what must be the market's expectation of the dividend growth rate? Note: Round your answer to 2 decimal places.

A firm recently paid a dividend of $2.05 per share, but analysts expect the dividend to decrease by 6% per year.  The risk free rate is 1.5% and the market risk premium is 7%. If its beta is 2.25 and the market is in equilibrium what is the value of the stock?  (explain your answer)   $19.32 $8.82 $11.17 $8.29