Alla Bazzter Excursions Co. holds a total in assets of $840,000 but $168,000 of that is excess cash. The firm has 80,000 total shares outstanding and expects $2 million in net income this year. The firm is considering its options with the excess cash, which includes stock buy-back. What will the net effect to the company's earnings-per-share (EPS) if it executes the stock buy back?
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- Beta Industries has net income of $2,000,000 and it has 1,000,000 shares of common stock outstanding. The company’s stock currently trades at $32 a share. Beta is considering a plan in which it will use available cash to repurchase 20% of its shares in the open market. The repurchase is expected to have no effect on either net income or the company’s P/E ratio. What will be its stock price following the stock repurchase?FedEx Corporation (FDX) has a current share price of $157.62 and is expected to have earnings per share (EPS) next year of $11.32 per share. Analysts expect that FedEx's closest competitor, United Parcel Service, Inc. (UPS), will have earnings next year of $8.37 per share. FedEx's cost of capital is 11%. What is your current estimate of the value of one share of UPS stock using the method of comparables? OA. $213.17 OB. $76.09 OC. $13.92 OD. $116.54 OE. $154.67 OF. None of the above is withing $0.35 of the value of one share of UPS stock.Gamma Industries has net income of $3,800,000, and it has1,490,000 shares of common stock outstanding. The company’s stock currently trades at $67a share. Gamma is considering a plan in which it will use available cash to repurchase 10%of its shares in the open market at the current $67 stock price. The repurchase is expectedto have no effect on net income or the company’s P/E ratio. What will be its stock pricefollowing the stock repurchase?
- Gamma Industries has net income of $1,100,000, and it has 1,355,000 shares of common stock outstanding. The company's stock currently trades at $35 a share. Gamma is considering a plan in which it will use available cash to repurchase 30% of its shares in the open market at the current $35 stock price. The repurchase is expected to have no effect on net income or the company's P/E ratio. What will be its stock price following the stock repurchase? Do not round intermediate calculations. Round your answer to the nearest cent.You expect Fab Corp to pay a dividend of $2.14/share next year (Year 1); $2.24/share in Year 2; $2.35/share in Year 3; and $2.55/share in Year 4. You also believe the stock will trade in the market at $130/share at the end of Year 4. Draw a timeline for Fab Corp given your expectations assuming all cash flows occur at the end of each year. You have estimated Fab Corp’s Cost of Equity to be 9.1%. Using your timeline, estimate what Fab’s stock should be trading at now.The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D₁) at the end of the current year will be $1.40. The growth rate (g) is 10 percent and the discount rate () is 14 percent. a. What should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Price of the stock b. If there is a 5 percent total underwriting spread on the stock, how much will the issuing corporation receive? (Do not round intermediate calculations and round your answer to 2 decimal places.) Net price to the corporation c. If the issuing corporation requires a net price of $33.50 (proceeds to the corporation) and there is a 5 percent underwriting spread, what should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Necessary public price
- The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D1) at the end of the current year will be $1.64. The growth rate (g) is 8 percent and the discount rate (Ke) is 13 percent. What should be the price of the stock to the public? If there is a 7 percent total underwriting spread on the stock, how much will the issuing corporation receive? If the issuing corporation requires a net price of $31.30 (proceeds to the corporation) and there is a 7 percent underwriting spread, what should be the price of the stock to the public? (Round to two places to the right of the decimal point.)Based on the free cash flow valuation model, you estimate Tigers Construction's value of operations is $750 million. Its balance sheet shows $50 million of short-term investments that are unrelated to operations, $100 million of accounts payable, $100 million of notes payable, $200 million of long-term debt, $40 million of common stock, and $160 million of retained earnings. Tigers has 10 million shares of stock outstanding. What is the best estimate for the stock price per share ? a. $45.1 b. $52.5 c. $47.5 d. $50.0 e. $42.9You expect X-Co will pay a dividend of $76 million and repurchase $100 million of its common shares next year (Year 1) with both expected to grow 8% in Year 2 and 6% in Year 3. If you expect the company to be sold for $12 billion at the end of Year 3, and you have calculated the cost of equity to be 8.4%, what do you estimate the true value of the company’s net worth to be now? (First draw a timeline. Assume all cash flows are at the end of the year.)
- Please Provide correct answer with optionMaynard Steel plans to pay a dividend of $2.89 this year. The company has an expected earnings growth rate of 3.7% per year and an equity cost of capital of 10.9%. a. Assuming Maynard's dividend payout rate and expected growth rate remain constant, and Maynard does not issue or repurchase shares, estimate Maynard's share price. b. Suppose Maynard decides to pay a dividend of $0.98 this year and use the remaining $1.91 per share to repurchase shares. If Maynard's total payout rate remainsconstant, estimate Maynard's share price. c. If Maynard maintains the same split between divdends and repurchases, and the same payout rate, as in part (b), at what rate are Maynard's dividends, earnings pershare, and share price expected to grow in the future? Note: The share price is expected to also grow at the same rate as dividends and earnings per share.Maynard Steel plans to pay a dividend of $3.15 this year. The company has an expected earnings growth rate of 3.5% per year and an equity cost of capital of 9.5%. Assuming that Maynard's dividend payout rate and expected growth rate remainconstant, and that the firm does not issue or repurchase shares, estimate Maynard's share price. Suppose Maynard decides to pay a dividend of$1.09 this year and use the remaining $2.06 per share to repurchase shares. If Maynard's total payout rate remains constant, estimate Maynard's share price.