Phoenix Corp, faltered in the recent recession but is recovering. Free cash flow has grown rapidly. Forecasts made in 2019 are asfollows:(5 millions) 2020 2021 2022 2023Net income1.01.0InvestmentFree cash flow 02.0 3.2 3.711.0 1.2 1.41.0 2.0 2.3Present valuePhoenix's recovery will be complete by 2024, and there will be no further growth in net income or free cash flow (it will remainconstant at $2.6 million after 2024).20244.0a. Calculate the PV of free cash flow, assuming a cost of equity of 9%. (Do not round intermediate calculations. Enter your answer inmillions rounded to 2 decimal places.)Price per share1.42.6millionb. Assume that Phoenix has 12 million shares outstanding. What is the price per share? (Do not round intermediate calculations.Round your answer to 2 decimal places.)

The value of cash available to a corporation after covering the costs of doing business is measured…

a. Calculate the PV of free cash flow, assuming a cost of equity of 9%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million b. Assume that Phoenix has 12 million shares outstanding. What is the price per share? (Do not round intermediate calculations.

a. Calculate the PV of free cash flow, assuming a cost of equity of 9%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million b. Assume that Phoenix has 12 million shares outstanding. What is the price per share? (Do not round intermediate calculations.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Anderson systems has just issued preferred stock. The stock has a 15% annual dividend and $100 par value and was sold at $125 par share. In addition, flotation cost of $15 par share must be paid. 1. Calculate the cost of preferred stock. 2. Explain two (2) disadvantages of discounted cashflow analysis.
Carby Hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $7.38 per share. If the required return on this preferred stock is 7.0%, at what price should the preferred stock sell? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.
a. An initial margin requirement is 54% and maintenance margin of 48%. An investor buys GPH, 9500 shares of stock on margin at Tk. 86.50 per share. The price of the stock subsequently drops to tk. 55.70. a. Find the amount investor has to deposit for initiating the transaction. b. What is the actual margin at tk. 54.25 share price is the account restricted? c. If the price rises to tk. 61.90, is there a margin call? d. Show the amount of margin call is required to bring back account into operational at price of tk. 63.10?
Suppose a stock had an initial price of $56 per share, paid a dividend of $1.60 per share during the year, and had an ending share price of $50. Compute the percentage total return, dividend yield, and capital gains yield. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
B. Answer the following problems completely 3. A property holdings declared of P9 per share for the common stock. If the common stock closes at P76, how large is the stock yield ration on this investment?
Please do not give image format and dont use chatgpt
Solve the problem with complete solution. 4. A stock pays an annual dividend of 80 per share. If the stock is trading at 1,500, what is the dividend yield?
A MOVING toO anotner question will save this response. Question 15 You bought a stock for $39 and you received dividends of $4. The stock is now selling for $47. What is your total percentage return? (please answer in decimal numbers, ie., use 0.05 in stead of 5%) A Moving to another question will save this response. P Type here to search 9.
Suppose that Xtel currently is selling at $46 per share. You buy 250 shares using $8,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? b. If the maintenance margin is 25%, how low can Xtel's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $5,750 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $8,000 of your own money) if Xtel is selling after 1 year at: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel…
If D₁=$5.00, rs-10%, and g = -5%, would anyone buy the stock? If so, at what price? No. It is -$2.60. Yes. It is $33.33. No. It is -$33.33. Yes. It is $55.00 No. It is $25.00. Yes. It is $35.98.
The required return on the stock is 8.87%. Given the cash flows in the summary quote, what is the value of the stock? Answer

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