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 OF $154.67

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 OF $154.67

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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Similar questions

CX Enterprises has the following expected dividends: $1.12 in one year, $1.24 in two years, and $1.35 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.35 and so on). If CX's equity cost of capital is 12.2%, what is the current price of its stock?
Krell Industries has a share price of $22.35 today. If Krell is expected to pay a dividend of $0.84 this year and its stock price is expected to grow to $24.51 at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is 3.8%. (Round to one decimal place.) The capital gain rate is 13.42 %. (Round to one decimal place.)
NoGrowth Corporation currently pays a dividend of $0.54 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 12.9% (effective annual rate)? The stock price is $ (Round to the nearest cent.)
You are considering investing in Henderson Engineers Ltd. The book value of shareholders' equity is $40,0000,000. The firm has made a net profit of $ 660,000 for the year ending 30 June 2023. The earnings per share is $1.30. You also find the PE ratio for firms similar to Henderson is 12. a) What is the book value per share for Henderson Engineers Ltd? b) What price would you expect Henderson shares to sell for? c) Explain would you invest in this share and why.
assume evco, inc., has a current stock price of $59 and will pay a $1.75 dividend in one year; its equity cost of capital is 13%. what price must you expect evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? the expected price is $ (round to the nearest cent.)
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Keidis Industries will pay a dividend of $4.15, $5.25, and $6.45 per share for each of the next three years, respectively. In four years, you believe that the company will be acquired for $59.00 per share. The return on similar stocks is 11.7 percent. What is the current stock price?
Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.92. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is ☐ %. (Round to two decimal places.)
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