An analyst has gathered the following information for the Oudin Corporation: Expected earnings per share = €5.49 Expected dividends per share = €2.13 Dividends are expected to grow at 2.53 percent per year indefinitely The required rate of return is 7.74 percent Based on the information provided, compute the price/earnings multiple for Oudin (Enter your answer as a number with two decimal places, like this: 12.34)

An analyst has gathered the following information for the Oudin Corporation: Expected earnings per share = €5.49 Expected dividends per share = €2.13 Dividends are expected to grow at 2.53 percent per year indefinitely The required rate of return is 7.74 percent Based on the information provided, compute the price/earnings multiple for Oudin (Enter your answer as a number with two decimal places, like this: 12.34)

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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The next dividend payment by Hoffman, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 5.00 percent forever. If the stock currently sells for $49.30 per share, what is the required return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Redan, Inc., is expected to maintain a constant 5.4 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 3.9 percent, what is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return %
The XYZ Company paid $1.95 dividend yesterday. Its dividend growth rate is expected to be constant at 21.90% for 2 years, after which dividends are expected to grow at a rate of 5.70% forever. Its required return (rs) is 13.55%. What is the best estimate of the current stock price? Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
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Financial analysts forecast Limited Brands (LTD) growth rate for the future to be 7.5 percent. LTD's recent dividend was $0.70. What is the value of Limited Brands stock when the required return is 9.5 percent? (Round your answer to 2 decimal places.)
Paccar's current stock price is $95.47, and it is likely to pay a $2.79 dividend next year. Because analysts estimate Paccar will have an 9.5 percent growth rate, what is its required return? Note: Round your answer to 2 decimal places.
(Computing rates of return) From the following price data, compute the annual rates of return for Asman and Salinas. Time 1 2 3 12 4 14 (Click on the icon in order to copy its contents into a spreadsheet.) How would you interpret the meaning of the annual rates of return? Asman $9 11 Salinas $30 27 32 36 The rate of return you would have earned on Asman stock from time 1 to time 2 is %. (Round to two decimal places.)
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As an analyst, you have gathered the following information on a company you are tracking. The current annual dividend is $1.75. Dividends are expected to grow at a rate of 14% over the next 4 years, and then decline linearly to 5% over the next 7 years, and then remain at a long term equilibrium growth rate of 5% in perpetuity; the required return is 10%. Calculate the value of the company
You are considering purchasing stock in a company that is expected to pay a $ 3.34 dividend later this year and you require a return of 7.79%. Assume the dividend will continue to be paid each year thereafter and will grow every year as described below. C What is the maximum price you would be willing to pay if you expect a growth rate of 2%? $ 58.84 (Enter as a whole number with two decimal places, such as 10.19.) What is the maximum price you would be willing to pay if you expect a growth rate of 5%? $ 125.70 What is the maximum price you would be willing to pay if you expect a growth rate of 7%? $452.38 What is the relationship between the price of a stock and the firm's growth rate? O A. The stock price is exactly equal to the growth rate times the dividend. B. As the growth rate investors expect increases, the price they are willing to pay also increases. OC. As the growth rate investors expect increases, the price they are willing to pay decreases. O D. There is no relationship.
Suppose that your estimates of the possible one-year returns from investing in the common stock of the AYZ Corporation were as follows: Probability of occurrence 0.15 0.25 0.3 0.15 0.15 Possible return -10% 5% 20% 35% 50% What are the expected return? Calculate the standard deviation?

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