MF Corporation has an ROE of 16% and a plowback ratio of 40%. The market capitalization rate is 13%. Required: a. If the coming year's earnings are expected to be $1.90 per share, at what price will the stock sell? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. What price do you expect MF shares to sell for in three years? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Price b. Price
Q: A 9.14% annual coupon, 23-year bond has a yield to maturity of 4.64%. Assuming the par value is…
A: The annual coupon payment on the bond is calculated belowThe number of years left to maturity of the…
Q: Log on to finance.yahoo.com and enter the ticker symbol "LVS" in the Quote Lookup box to find…
A: Return is the total income earned or expected to be earned by an investor on their investments in a…
Q: Cute Camel Woodcraft Company is a small firm, and several of its managers are worried about how soon…
A: Payback period (PBP) refers to the period or duration within which the company is able to recover…
Q: You wish to evaluate a project requiring a $59,900 initial investment and having a useful life of…
A: IRR is also known as Internal Rate of Return.. It is a capital budgeting technique which helps in…
Q: You hold two bonds. You own a $1,000 face value bond from Company B that eleven years to maturity.…
A: ParticularsBond ABond BFace value$1,000$1,000Coupon rate8.6%4.6%YTM6.6%6.6%Years to maturity1111
Q: Advantages and disadvantages of exchange-traded funds versus mutual funds.
A: In this question, we are required to determine the advantages and disadvantages of exchange-traded…
Q: If a MNC has short-term financing need, the ideal currency to borrow should have low interest rate…
A: Interest rate effects the exchange rate of currency and exchange rate would change depends on change…
Q: A zero - coupon bond has a face value of R10000.it matures in 13years. The yield to maturity is 4.7…
A: The objective of the question is to calculate the present value of a zero-coupon bond. A zero-coupon…
Q: suggests that an increase in the dividend growth rate will increase the value of a stock. However,…
A: The stock price which is the maximum price to be paid for a share consists of dividends and terminal…
Q: Sparkling Water, Inc., expects to sell 3.7 million bottles of drinking water each year in…
A: Variables in the question:No. of bottles expected to be sold each year in perpetuity=3.7…
Q: If you could pay the same loan above at a compound rate: What would the monthly payment be? What…
A: An add-on loan worth $4,500 is offered to the borrower at 18% p.a. for five years. The monthly…
Q: XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $2 2 2 2 Year 2018…
A: YearBeginning-of-Year PriceDividend paid at year end2018$104$22019$115$22020$90$22021$105$2
Q: los owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is…
A: Price of bond is the present value of coupon payments plus present value of the par value of the…
Q: Financial analysts forecast Safeco Corp.'s (SAF) growth rate for the future to be 10 percent.…
A: Formula:Stock Price = D1 / (r - g)Where:D1 = Recent dividend ($1.4)r = Required return…
Q: Required information [The following information applies to the questions displayed below.] Matt and…
A: ParticularsAmountSalary$113,000.00Net short term capital gain$2,100.00Net long term capital…
Q: A bank is offering to pay you $1000 at the beginning of each month for the next 10 years. The…
A: The objective of this question is to calculate the present value of an annuity due. An annuity due…
Q: VALUE OF EURO (U.S. dollars per euro) 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 0 50 100 150 200 250 300…
A: The supply schedule for euros exhibits an upward (positive) slope, indicating that as the exchange…
Q: Green Submarine has a project with the following cash flows: Year Cash Flows −$ 17,300 1…
A: MIRR- This is a modification of IRR and it is based on the assumption that positive cash flows are…
Q: In 2021, Landon has self-employment earnings of $195,000. Required: Compute Landon's self-employment…
A:
Q: Problem 7-33 (Algo) Suppose there are two independent economic factors, M₁ and M₂. The risk-free…
A: Expected return is frequently used alongside risk metrics like beta or standard deviation. When…
Q: McKerley Corporation has preferred stock outstanding that will pay an annual dividend of $3.25 per…
A: Dividend speak to a portion of a company's benefits dispersed to its shareholders as a return on…
Q: Jamboo Corporation is considering extending trade credit to some customers previously considered…
A: Calculate:the amount of uncollectible accountsthe additional collection coststhe production and…
Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…
A: Capital budgeting refers to the concept used for evaluating the viability of an investment using…
Q: Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: D. 25 20 -15- -10- ហ -5 -107 -157 -201 -25+ -30 Long Put 50 The breakeven (i.e., zero profit) point…
A: Break even point is a point in which both the seller and buyer in an options contract enjoys no…
Q: An investor deposits $1000 at the beginning of each year for five years in a fund earning 5%…
A: In financial economics, future value signifies the estimated value of an investment at a designated…
Q: An investor with a required return of 15 percent for very risky investments in common stock has…
A: A stock is a capital market instrument which gives the investor an ownership interest in the company…
Q: Find the duration of a bond with settlement date June 9, 2018, and maturity date December 11, 2027.…
A: The duration of a bond is the indicator of a bond's sensitivity to interest rate fluctuations. It…
Q: You deposit $ 75,895 in your account today. You make another deposit at t = 1 of $ 54,744. How much…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: loan. ExxonMobil would like to get a fixed rate loan. How much can Caterpillar save by entering a…
A: The interest rate swap is an agreement between two parties to swap interest rate cash flows over a…
Q: 3.Lopez Industries has identified the following two mutually exclusive capital investment projects:…
A: IRR is internal rate of return. NPV is net present value. Both are important capital budgeting…
Q: Complete the following balance sheet using the information given. Round account balances to the…
A: Financial ratio analysis is a method used to assess aspects of a company's performance financial…
Q: Consider a $100,000, 30-year, 6.6% mortgage with monthly payments. What portion of the payments…
A: A mortgage refers to a covered loan borrowed to purchase a property with the property itself acting…
Q: DRK, Incorporated, has just sold 140,000 shares in an initial public offering. The underwriter's…
A: Shares sold/issued = N = 140,000Explicit fees = 84,000Offering price = 54 per shareChange in share…
Q: Calculate the amount of money that must be deposited at the end of every three months into an…
A: Quarterly deposit refers to an amount that is deposited every quarter for the purpose of saving for…
Q: Required: A fund manages a $4.8 billion equity portfolio with a beta of 0.60. If the S&P contract…
A: The fund would need to sell futures contracts equivalent to the beta-weighted value of its portfolio…
Q: Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to…
A: Equity beta = 1.4Risk free rate = 2.6%Market risk premium = 8%Dividend per share = 2.44Return on…
Q: For each of the following annuities, calculate the present value. Note: Do not round intermediate…
A: I have put -ve sign in annual payment. This is because this amount goes from our side. Hence there…
Q: You want to create a portfolio equally as risky as the market, and you have $2,200,000 to invest.…
A: Investment in Stock A = $506,000Investment in Stock B = $770,000Total Investment = $2,200,000Let…
Q: en Machine Tools has total assets of $3,130,000 and current assets of $866,000. It turns over its…
A: The objective of the question is to calculate the return on stockholders' equity for Machine Tools.
Q: 1) You are about to borrow $12,000 from a bank at an interest rate of 10% compounded annually. You…
A: To solve this problem, we can use the formula for the equal annual payment on a loan, known as an…
Q: What is the weighted-average cost of capital for SKYE Corporation given the following information? 1…
A: The weighted-average cost of capital (WACC) for SKYE Corporation is calculated as approximately 8.6%…
Q: Annuity Payment and EAR You want to buy a car, and a local bank will lend you $20,000. The loan…
A: We need to use loann amortization formula below to calculate monthly payments. where P=Loann=number…
Q: Stella places a market order with her broker to buy 1000 shares of OneWorld Corp. The broker buys…
A: Number of shares = 1000 sharesPurchase price = $16.70 eachSelling price = $17.75 eachCommission =…
Q: Complete using manaul computation You have 20 years left for your retirement. You wish to…
A: The time value of money is a concept in finance that evaluates the worth of future expected cash…
Q: Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution…
A: Degree of operating leverage refers to the measurement of change in the percentage of operating…
Q: What is the price of a $1,000 par value, semi - annual coupon bond with 18 years to maturity, a…
A: Bond price refers to the price used for buying and selling the bonds in the market among investors…
Q: Higgins currently has 2 million shares of common stock outstanding that are selling for $32 per…
A: You're right, the EBIT indifference level for Higgins in this scenario is d.…
Q: Kestrel, Inc. has an equity market capitalization of $6,500,000. Its equity beta is 2.4. The…
A: Value of Equity = e = $6,500,000Beta = b = 2.4Risk free rate = rf = 1.4%Market Return = rm =…
Q: Paul obtained a loan of $37,500 at 4.60 % compounded monthly. How long will it take to settle the…
A: Loans have to be paid off in the form of fixed periodic payments. Here the loans are being paid in…
MF Corporation has an
Required:
-
If the coming year’s earnings are expected to be $1.90 per share, at what price will the stock sell?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
-
What price do you expect MF shares to sell for in three years?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Trending now
This is a popular solution!
Step by step
Solved in 1 steps
- MF Corporation has an ROE of 12% and a plowback ratio of 60%. The market capitalization rate is 10%. Required: a. If the coming year's earnings are expected to be $1.50 per share, at what price will the stock sell? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. What price do you expect MF shares to sell for in three years? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Price b. Price $ $ 43.00 X 26.40MF Corporation has an ROE of 16% and a plowback ratio of 40%. The market capitalization rate is 13%. Required: a. If the coming year's earnings are expected to be $1.90 per share, at what price will the stock sell? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. What price do you expect MF shares to sell for in three years? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Price b. PriceMF Corp. has an ROE of 14% and a plowback ratio of 60%. The market capitalization rate is 14%. a. If the coming year's earnings are expected to be $2.20 per share, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price Price $ b. What price do you expect MF shares to sell for in four years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 17 15.71
- The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $26.75 per share; its last dividend was $2.50; and it will pay a $2.60 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's beta is 2.0, the risk-free rate is 8%, and the average return on the market is 14%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % c. If the firm's bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations. Round your answer to two decimal places. % d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost…The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 8% per year. Callahan's common stock currently sells for $21.75 per share; its last dividend was $1.50; and it will pay a $1.62 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's beta is 1.6, the risk-free rate is 8%, and the average return on the market is 12%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % c. If the firm's bonds earn a return of 10%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the judgmental risk premium of 4% in your calculations. Round your answer to two decimal places. % d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity? Do not…MF Corp. has an ROE of 17% and a plowback ratio of 60%. The market capitalization rate is 14%. a. If the coming year's earnings are expected to be $2.80 per share, at what price will the stock sell (round to 2 decimal places)? Price $? b. What price do you expect MF shares to sell for in four years (round to 2 decimal places)? Price $?
- 'S A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 14%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected priceSimtek currently pays a $3.5 dividend (D0) per share. Next year’s dividend is expected to be $4 per share. After next year, dividends are expected to increase at a 8 percent annual rate for 3 years and a 3 percent annual rate thereafter. Use Table II to answer the questions. Do not round intermediate calculations. Round your answers to the nearest cent. What is the current value of a share of Simtek stock to an investor who requires a 16 percent return on his or her investment?$ If the dividend in year 1 is expected to be $4 and the growth rate over the following 3 years is expected to be only 5 percent and then 3 percent thereafter, what will the new stock price be?$Assume Evco, Inc., has a current stock price of $39 and will pay a $1.80 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.)
- The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $28.00 per share; its last dividend was $2.50; and it will pay a $2.60 dividend at the end of the current year. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % If the firm's beta is 1.5, the risk-free rate is 8%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % If the firm's bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations. Round your answer to two decimal places. % If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's…The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $28.00 per share; its last dividend was $2.50; and it will pay a $2.60 dividend at the end of the current year. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %Suppose Acap Corporation will pay a dividend of $2.83 per share at the end of this year and $3.07 per share next year. You expect Acap's stock price to be $52.34 in two years. Assume that Acap's equity cost of capital is 10.7%. a. What price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for two years? b. Suppose, instead, you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in part b, what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this price compare to your answer in part a? a. If you planned to hold the stock for two years, the price you would pay for a share of Acap stock today is $ (Round to the nearest cent.)