Lear & Co has a PE of 17, a forward PE of 14.5, and a price of $67.40 per share. The company has 85.2 million shares outstanding. Net income for next year is projected to be closest to: O A. $396.0 million. O B. $832.7 million. C. $337.8 million.

Lear & Co has a PE of 17, a forward PE of 14.5, and a price of $67.40 per share. The company has 85.2 million shares outstanding. Net income for next year is projected to be closest to: O A. $396.0 million. O B. $832.7 million. C. $337.8 million.

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

Aaron Inc. has 301 million shares outstanding. It expects earnings at the end of the year to be $602 million. The firm's equity cost of capital is 10%. Aaron pays out 50% of it's earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 7% per year, what is Aaron's share price?
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You are analyzing a large stable company. For the year ending 12/31/05 the company reported earnings of $58,900 and book value at the end of 2005 was $371,700. You expect earnings to grow at 5% a year in perpetuity, and the dividend payout ratio of 70% to continue. The company borrows at 8%, and has a cost of equity of 12%. The company has 25,000 shares outstanding. 1. What is your estimate of price per share using the dividend discount model at 12/31/05? a) $21.65 b) 20.62 c) $24.74 d) $23.56
A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has 135 million shares of preferred stock and 390 million shares of common stock. The preferred stock is guaranteed a dividend of $1.30 per year and costs $32 per share. The common stock costs $29 per share. What is the earnings per share for the common stock? Enter your response as dollars and cents rounded to 2 decimal places.
Time Warner shares have a market capitalization of $70 billion. The company is expected to pay a dividend of $0.35. per share and each share trades for $20. The growth rate in dividends is expected to be 8% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 8%. If the firm's tax rate is 25%, compute the WACC? O A. 9.09% B. 7.72% C. 8.63% OD. 8.18%
Aaron Inc. has 301 million shares outstanding. It expects earnings at the end of the year to be $638 million. The firm's equity cost of capital is 12%. Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant 6% per year, what is Aaron's share price? A. $35.32 B. $8.83 C. $26.49 D. $17.66
Perine, Inc., has balance sheet equity of $5.3 million. At the same time, the income statement shows net income of $763,200. The company paid dividends of $431,208 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 17, what is the target stock price in one year? Assume the firm will grow at the sustainable growth rate.
A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has 135 million shares of preferred stock and 390 million shares of common stock. The preferred stock is guaranteed a dividend of $1.30 per year and costs $32 per share. The common stock costs $29 per share. What is the price-to-earnings ratio for the common stock? Enter your response rounded to 1 decimal places.
The cost of capital is 15% and net income to stockholders generated over the past year and available for present investment, amounts to $1,000,000. The firm has 1,000,000 common shares outstanding, currently trading at a price of $10.50 per share. A new issue of shares would require a flotation cost of $0.50 per share. Calculate the dividend per share, the dividend payout ratio, the dividend yield, and the number of new shares Essex will have to issue.
Your company has expected future cash flows of $70 million in perpetuity. The company's WACC is 12.8%. The company has $337 million in debt, and $188 million in excess cash, and 12 million shares. What is the share price of the company?
Assume a company has 10mm outstanding shares of stock that currently trade at $50 per share. Assume the company cost of equity is 18% and its after-tax cost of debt is 6%. Assume the company has $250mm in long term debt and $50mm of other liabilities. What is the WACC?
AFW Industries has 180 million shares outstanding and expects earnings at the end of this year of $735 million. AFW plans to pay out 56% of its earnings in total, paying 37% as a dividend and using 19% to repurchase shares. If AFW's earnings are expected to grow by 8.9% per year and these payout rates remain constant, determine AFW's share price assuming an equity cost of capital of 12.6%. The price per share will be $ (Round to the nearest cent.)

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