4. Toyota Motor Corp's stock price is about $157. Consensus analysts' forecasts about Toyota'searnings in 2022 and 2023 are $16.21 and $17.95, respectively. The book value per share is $160.6.The company has a payout ratio about 25%. The risk free rate for Japan capital market is 0.24% andthe market risk premium is about 7.75%. Firm Beta is estimated to be about 0.64. <a. Forecast book value, return on common equity, and residual earnings for 2022 and 2023.<b. Provide a building block analysis about each company's stock price.<C. What are the implied market's expectation about growth rates of Toyota's long-term residualincome after 2024?<d. If you are a value investor, how would you evaluate Toyota price and make investment decisions?Also what additional factors you may need to find out more information about in making your finaldecision?<

The objective of the question is to analyze the financial performance of Toyota Motor Corp using…

Answered: 4. Toyota Motor Corp's stock price is…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 22P

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Visa, Inc. (V) has a beta of 1.08, is selling for $56.72, and will pay a $2.35 dividend at the end of the year. If the stock is priced at $57.15 at year-end, it is __________, so __________ it. Assume the risk-free rate is 3.05%, and the expected market return is 3.92%. A. underpriced / sell B. underpriced / buy C. overpriced / sell D. fair-valued / hold
Currently, the nominal risk-free rate is 1.64 percent, the market risk premium is 8 percent, and the beta for Starbucks stock is 0.52. Inflation is expected to decrease by 0.3 percentage points and investors' risk aversion is expected to increase by 3.2 percentage points. If these changes happen, what would investors require as a return on Starbucks' stock?
Please give me true answer this financial accounting
Required rate of return
The stock of Eaton Corporation (ticker: ETN) has an E(R) = 9.3% and a reward-to-risk ratio = 6.32%. If Eaton’s beta = .94, then the current return on U.S. T-Bills is: a. 3.23% b. 1.32% c. 3.10% d. 2.94% e. 3.36%
← You are thinking of buying a stock priced at $109.31 per share. Assume that the risk-free rate is about 4.03% and the market risk premium is 6.48%. If you think the stock will rise to $118.76 per share by the end of the year, at which time it will pay a $3.48 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.) ...
You expect General Motors (GM) to have a beta of 1.3 over the next year and the beta of Exxon Mobil (XOM) to be 0.9 over the next year. Also, you expect the volatility of General Motors to be 40% and that of Exxon Mobil to be 30% over the next year. Which stock has more systematic risk? Which stock has more total risk? A. GM, GM В. GM, ХОМ С. ХОМ, ХОм D. ХОМ, GM
According to the Bloomberg Network (a Financial TV channel), the current return on the U.S T-bill is 4.0% and the market risk premium is 8.5%. Given this news, in the table below, the only stock that is correctly priced is: See attached table a. Stock E b. Stock C c. Stock B d. Stock A e. Stock D
Suppose that you have estimated the CAPM betas for the equity shares of the following two firms: Levi Strauss & Co. ( NYSE: LEVI): \beta ^ LEVI = 1.10 Tesla Inc. (Nasdaq: TSLA) : \beta ^ TSLA = 1.90 Assume that the risk - free rate is estimated at 4%, stable over the entire CAPM estimation period, and will remain in the foreseeable future. Answer questions a) and b) below. (Lecture notes p.12, pp.15-17) Suppose the expected return on S&P 500 index, a proxy for the market portfolio, is estimated at 17%. Find the CAPM required returns on equity shares of Levi's and Tesla, respectively. Answer (show the steps/calculation toward your results): Suppose the market risk premium is estimated at 9%. Find the CAPM required returns on equity shares of Levi's and Tesla, respectively. Answer (show the steps/calculation toward your results):
You are considering an investment in Keller Corp's stock, which is expected to pay a dividend of $0.90 a share at the end of the year and has a beta of 0.40. The risk-free rate is 2.40%, and the market risk premium is 4.40%. Keller currently sells for $103.00 a share, and its dividend is expected to grow at some constant rate g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 5 years? $115.55 $121.07 $125.05

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