Here are data on two stocks, both of which have discount rates of 14%: Return on equity Earnings per share Dividends per share Dividend payout ratios Stock A 14% $ 1.50 $ 1.20 a. What is the dividend payout ratio for each firm? Note: Enter your answers as a percent rounded to 2 decimal places. Expected dividend growth rates Stock price Stock B $ 1.40 $ 1.20 Stock A 10% Stock A 80.00 % b. What is the expected dividend growth rate for each stock? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Stock B 86.00 % Stock A 2.80 % c. What is the value of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock B Stock B 1.43 %

Here are data on two stocks, both of which have discount rates of 14%: Return on equity Earnings per share Dividends per share Dividend payout ratios Stock A 14% $ 1.50 $ 1.20 a. What is the dividend payout ratio for each firm? Note: Enter your answers as a percent rounded to 2 decimal places. Expected dividend growth rates Stock price Stock B $ 1.40 $ 1.20 Stock A 10% Stock A 80.00 % b. What is the expected dividend growth rate for each stock? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Stock B 86.00 % Stock A 2.80 % c. What is the value of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock B Stock B 1.43 %

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

See similar textbooks

Similar questions

what is your portfolio dollar return and percentage return?
What equation was used to get this? Common Stock Share price 65 Dividends 2.53 Growth rate 9% Riskfree Rate 7% Market Risk Premium 5.50% Beta 1.2 Cost of common stock(using DGM) 13.24% Cost of common stock(using CAPM) 13.60% Cost of common Equity 13.42%
Using the data in the table to the right, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid. Return for the entire period is. (Round to two decimal places.) Date Jan 1 Feb 5 May 14 Aug 13 Nov 12 Dec 31 Price $31.42 $31.65 $28.33 $31.96 $39.34 $42.32 Dividend D $0.22 $0.21 $0.19 $0.19 1
In the cell, by using cell references to the given data, calculate the value of stock C. Stock C Dividend expected next year $ 0.65 Dividend growth rate 10% Required return 14% Stock value
Black Bear Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Black Bear Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: Year 1, $42,500; Year 2, $18,000; Year 3, $223,500; Year 4, $178,000; Year 5, $222,000; and Year 6, $222,000. During the entire period, the outstanding stock of the company was composed of 50,000 shares of cumulative preferred 2% stock, $80 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears on January 1, Year 1. Summarize the data in tabular form. If required, round your per share answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share Year 1 $42,500 $ Year 2 18,000 Year 3…
Use the information in the following stock quote to answer the question: As of February 1, 2XX1 Name Symbol Open High Low Close Net Chg Div Yield PE Target TGT 87.01 87.32 86.75 87.05 -0.32 2.56 2.93 16.76 What was Target’s earnings per share over the last year? (Round your answer to 2 decimal places. (e.g., 32.16))
Vijay
Use the following tables to assess the worthiness of Verticon stock as an investment. Verticon Stock Data (Current and Historical) 3:45PM EDT Aug 16, 2011 Price 18.85 USD Change +0.64 (+3.51%) Mkt cap 147.1B Div/yield 0.20/4.24 Shares 8,012 Beta 0.70 Book/share 11.335 EPS 1.11 12/2010 12/2009 12/2008 (Millions of Dollars) Total Assets 195,014 195,949 111,148 Total Liabilities 107,201 122,935 53,592 Preferred Shareholders’ Equity 52 61 73 Common Shareholders’ Equity 87,761 72,953 57,483 Shares Outstanding 8,012 8,070 6746 Book/Share ? 9.040 8.521 Q1 (Mar ’11) 2010 Net profit margin 15.24% 12.24% Return on equity 11.60% 9.30% Which one in bold? One of the most important features of a stock is its book value. The book value per share of Verticon’s stock for the year 2010 was equal to (10.954, 13.693, 11.502). Looking at the (Market cap, EPS, change in price, beta value, ROE) ,…
Return on Common Stock You buy a share of The Ludwig Corporation stock for $18.50. You expect it to pay dividends of $1.00, $1.0510, and $1.1046 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $21.48 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %
Using the data in the following table, Date Jan 1 Feb 5 " Calculate the returns for each subperiod below: (Round to five decimal places. Enter dividend yield and capital gain yield as decimal numbers.) Capital Gain Yield Price 33.88 30.67 $ calculate the dividend yield and the capital gain yield from investing in the stock from January 1 to December 31. Dividend Dividend Yield 0.17 Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Stock and Dividend Data Price $33.88 $30.67 $29.49 $32.38 $39.07 $41.99 Date Jan 1 Feb 5 May 14 Aug 13 Nov 12 Dec 31 Print Done Dividend $0.17 $0.17 $0.17 $0.17 X
Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $32,000; 20Y2, $64,000; 20Y3, $144,000; 20Y4, $184,000; 20Y5, $224,000; and 20Y6, $280,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, preferred 4% stock, $100 par, and 100,000 shares of common stock, $20 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dívidends in arrears at the beginning of 2OY1. Summarize the data in tabular form. If required, round your per share answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share 20Υ1 $32,000 20Y2 64,000 20Y3 144,000 20Y4 184,000 20Y5…
Consider the following information on two stocks: P(State) Stock A Stock B Boom 20% 30% 20% Normal 50% 12% -5% Slow 15% 4% 8% Recession 15% -10% 10% Calculate the covariance(A,B). (Enter percentages as decimals and round to 4 decimals)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS