Chain Reaction SA, has been growing at a phenomenal rate of 30% per year because of its rapid expansion and explosive sales. You believe that this growth rate will last for three more years and that the rate will than drop to 10% per year. Total dividends just paid were 5 million euros, and the required return is 20%. If the growth rate than remains at 10% indefinitely, what is the current share price?
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- The return of ABC company at present is 20%. This is assumed to continue for thenext 3 years and after that it is assumed to have a growth rate of 10% indefinitely.The dividend paid in the current year for the last year is $ 3.2. The required rate ofreturn is 15% and it is saleable in the market is 57$. What will be the estimated priceaccording to variable growth model? And is it advisable to sell. The PV factors @15%for Years 1 to 3 are 0.870, 0.756 and 0.658 respectively.XYZ Corp. is anticipating a sustained growth rate of 15% per year. Is it possible for them to achieve this growth rate given the following numbers. Debtequity ratio of 0.40 times Profit margin is 5.3 percent Capital Intensity Ratio is 0,75 times to answer: determine what the dividend payout ratio must be. How do you interpret the result?DeltaCo has a payout ratio of 0.6 and it reinvests the remainder of earnings in new projects. If next year's EPS (EPS1) will be $7.18, new projects have expected return of 15%, and investors require a rate of return is 10.8%, what is the present value of the firm's growth opportunities? Round your answer to the nearest penny.
- Genentech is expecting both earnings and dividends to grow by 15% in Year 1, 0% in Year 2, by 5% in Year 3, and at a constant rate of 10 percent in Year 4 and thereafter. The required return on Genentech is 15 percent, and it sells at its equilibrium current price $288. What is the approximate value of its expected dividend in Year 1, D1? Please show work on EXCEL!!! A) $0 B) $1.25 C) $1.75 D) $2.05 E) $2.85You are running a hot Internet company. Analysts predict that its earnings will grow at 20% per year for the next 9 years. After that, as competition increases, earnings growth is expected to slow to 3% per year and continue at that level forever. Your company has just announced earnings of $5 million. What is the present value of all future earnings if the interest rate is 10% ? (Assume all cash flows occur at the end of the year.) The present value of all future earnings is $ million. (Round to two decimal places.)Better Mousetraps has come out with an improved product, and the world is beating a path to its door. As a result, the firm projects growth of 20% per year for four years. By then, other firms will have copycat technology, competition will drive down profit margins, and the sustainable growth rate will fall to 5%. The most recent annual dividend was DIV1 = $1 per share. What are the expected values of (i) DIV1 , (ii) DIV2, (iii) DIV3, and (iv) DIV4? What is the expected stock price four years from now? The discount rate is 10%. What is the stock price today? Find the dividend yield, DIV1/P0. What will next year's stock price, P1, be? What is the expected rate of return to an investor who buys the stock now and sells it in one year?
- Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. a) What would be the likely stock price in year 5? b) What would be per annum rate of return implied by a change in prices from time 0 to time 5?grey manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1=$1.25). The stock sells fo $27.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?You are running a hot Internet company. Analysts predict that its earnings will grow at 30% per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 4% per year and continue at that level forever. Your company has just announced earnings of $1 million. What is the present value of all future earnings if the interest rate is 8%? (Assume all cash flows occur at the end of the year.) The present value is $ million. (Round to two decimal places.) ←
- XYZ Corp. is anticipating a sustained growth rate of 15% per year. Is it possible for them to achieve this growth rate given the following numbers. Debtequity ratio of 0.40 times Profit margin is 5.3 percent Capital Intensity Ratio is 0.75 times To answer: determine what the dividend payout ratio must be. How do you interpret the result? no excel plzYou are running a hot Internet company. Analysts predict that its earnings will grow at 10% per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 3% per year and continue at that level forever. Your company has just announced earnings of $4 million. What is the present value of all future earnings if the interest rate is 9%? (Assume all cash flows occur at the end of the year.) The present value is $ million. (Round to two decimal places.) ...Mexican Motors’ market cap is 250 billion pesos. Next year’s free cash flow is 10.5 billion pesos. Security analysts are forecasting that free cash flow will grow by 9.50% per year for the next five years.a. Assume that the 9.50% growth rate is expected to continue forever. What rate of return are investors expecting? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b-1. Mexican Motors has generally earned about 13% on book equity (ROE = 13%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company maintains the same ROE and investment rate for the long run. What will be the growth rate of earnings? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.) b-2. What would be the rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)