In 2020, Northwest Electric was trading at $30 per share, with a book value of $55 per share. Analysts forecasted earnings per share (EPS) of $0.75 and annual dividends of $2.20 per share. Calculate the ROCE (Return on Common Equity) forecast for the year.
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- The following are earnings and dividend forecasts made at the end of 2020 for the IBM Corporation with a $40 BV per common share at that time. In 2021, EPS will be $7 and DPS $1. In 2022, EPS will be $8 and DPS $1.50. In 2023, EPS will be $9 and DPS $2. The firm has a required equity return of 15% per year. Calculate the book value per share for the company for each year from 2021 to 2023, accordingly.Giant Enterprises' stock has a required return of 13.1%. The company, which plans to pay a dividend of $1.65 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: ( see attached chart ) a. If the risk-free rate is 4%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock.The stock price is P39.77, the required rate of return of shareholders is 12.4%, and the annual dividend expected to be declared next year is P3.50. Based on those information, what is the growth rate of the stock?
- Assume you’ve forecasted the following Net Income amounts for Chipotle over the period 2021-2030. Assuming a beta of 1.28, a risk-free rate of 1.14% and a market risk premium of 4.72%. Assume Chipotle pays “dividends” each period equal to 5.24% of net income. The beginning book value of equity equals $2,020,135. Calculate residual income and the present value of each residual income amount. (Don’t forget to calculate book value of shareholders’ equity each period.) See attatched picture for work 2. Calculate the continuing value assuming a 3% growth rate.Step 1: Multiply Net Income for 2030 by (1+g)Step 2: Multiply Book Value of Shareholder’s Equity at end of 2030 by RE (cost of equity).Step 3: Subtract Step 2 amount from Step 1 amount. This is the continuing residual income.Step 4: Assume the Step 3 amount is a perpetuity with growth (this amount will grow forever at a constant rate). Divide the Step 3 amount by (RE-g). It will be a big number. 3. Add…1. An analyst is reviewing the valuation of ALUW as of the beginning of October 2018 when ALUW is selling for GHc50. In the previous year, ALUW paid a GHc 1.48 dividend that the analyst expects to grow at a rate of 10 percent annually for the next four years at the end of the year 4, the analyst expects the dividend to equal 40% of earnings per share and the trailing P/E for ALUW to be 14. If the required return on ALUW common stock is 10.5%: Required: Calculate the per-share value of ALUW’S common stock.Analysts expect Costco stock to pay a dividend of $3.70 in 1 year and is expected to sell for $374.41 at that time. If the required return is 5.0%, what is the value of the stock?
- What is the cost of equity on these financial accounting question?Clark equipment currently pays a common stock dividend of $3.50 per share. The common stock price is $60. Analysts have forecast that earnings and dividends will grow at an average annual rate of 6.8 percent for the foreseeable future. What is the marginal cost of retained earnings?Suppose the dividends for the Seger Corporation over the past six years were $1.40, $1.48, $1.57, $1.65, $1.75, and $1.80, respectively. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Compute the expected share price at the end of 2022 using the perpetual growth method. Assume the market risk premlum is 11.7 percent, Treasury bills yield 5.9 percent, and the projected beta of the firm is 0.88. Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Share price S 1.80
- (Common stockholder expected return) The market price for the EarnestCorporation’s common stock is $43 per share. The price at the end of 1 year is expected to be $48, and dividends for next year should be $2.84. What is the expected rate of return?Use the dividend discount model to value a share of Toyota’s stock (ticker symbol: TM) as of December 31, 2021. In your application of this model, use the data provided on the most recent Toyota Value Line report to estimate the necessary dividend payment and the firm’s equity beta. Assume, that the expected growth rate of dividends in perpetuity (g) ranges from 2.5% to 3.5%/year.Yharnam Co. is expected to pay a dividend of D1 = $1.40 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5.00% per year in the future. The company's beta is 1.2, the Market Risk Premium is 6.25%, and the risk-free rate is 3.90%. What is the company's current stock price? Group of answer choices 24.06 18.59 28.00 22.40 21.88