Hi expart Provide correct answer In April 2005, General Motors traded at $28 per share on a book valueof $49 per share. Analysts were estimating that GM would earn 69 centsper share for the year ending December 2005. The firm was paying anannual dividend at the time of $2.00 per share.Calculate the return on common equity (ROCE) that analysts wereforecasting for 2005.

Explanation of Return on Common Equity (ROCE):ROCE is a financial metric that measures how…

Answered: In April 2005, General Motors traded at…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

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Apple Inc. (AAPL) is expected to pay a dividend of $1.59 at the end of the year. AAPL’s dividend payout ratio and return on equity (ROE) are 41.27% and 6.86%, respectively. Other things held constant, what would AAPL’s stock price be if the required rate of return is 6.47%? A. $93.14 B. $84.97 C. $72.26 D. $65.13
A company recently paid a $1.35 dividend. The annual dividend is expected to grow at a 18.5 percent rate. At a current stock price of $40.85, what return are shareholders expecting? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places. (e.g., 32.16))
Pacific Storage expects to have earnings per share of $5.25 in 2005, and $5.65 in 2006. The average price-earnings ratio for General industry is 10X (times). Pacific Storage has traditionally had a P/E ratio 12% higher than the industry, and in 2005 it is expected to be 15% higher than the industry. Calculate the expected price of Pacific's stock price in 2005 and 2006, based on expectations of EPS and P/E ratios.
Heavy Rain Corporation just paid a dividend of $4.33 per share, and the firm is expected to experience constant growth of 2.32% over the foreseeable future. The common stock is currently selling for $58.50 per share. What is Heavy Rain's cost of retained earnings using the Gordon Model (DDM) approach? Round the answers to two decimal places in percentage form
Use the Gordon Growth Model to estimate the cost of the ordinary shares (expressed as a percentage to two decimal places) from the information provided attached.
Rand Corp's stock price at the end of last year was $40.00, and its book value per share was $24.50. What was its Market/Book ratio?
A company's stock price rose 2.8% in 2011, and in 2012, it increased 79.7%.a. Compute the geometric mean rate of return for the two-year period 2011-2012. (Hint: Denote an increase of 79.7% by .797.)b. If someone purchased $1,000 of the company's stock at the start of 2011, what was its value at the end of 2012?c. Over the same period, another company had a geometric mean rate of return of 10.7%. If someone purchased $1,000 of the other company's stock, how would its value compare to the value found in part (b)?
Ametek Co's last annual dividend was $2.50 per share. its common stock is selling for $36.00 per share. if analysts are projecting 11% growth in earnings and dividends for the foreseeable future, what is Ametek's cost of common equity? a) 7.7% b) 18.7% c) 1.87% d) 11%
Last year, Big W Company reported earnings per share of $2.50 when its stock was selling for$50.00. If its earnings this year increase by 10 percent and the P/E ratio remains constant, whatwill be the price of its stock? Explain.
(Calculating rates of return) The S&P stock index represents a portfolio comprised of 500 large publicly traded companies. On December 24, 2007, the index had a value of 1,410 and on December 24, 2008, the index was approximately 921. If the average dividend paid on the stocks in the index is approximately 4.0 percent of the value of the index at the beginning of the year, what is the rate of retum eamed on the S&P index? What is your assessment of the relative riskiness of investing in a single stock such as Google compared to investing in the S&P index (recall from Chapter 2 that you can purchase mutual funds that mimic the returns of the index)? KIYD The rate of return earned on the S&P 500 is % (Round to two decimal places.)

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