On January 1, 2020, an analyst prepares the following forecasts for RENDERS INC.: 2020 2021 2022 2023 2024 Total Profit 50% 10% 4% 3% 3% Growth Payout Ratio 30% 50% 90% 90% 90% RENDERS INC's cost of equity equals 10 percent. Calculate the analyst's expected value-to-earnings ratio for RENDERS INC. on January 1, 2020 if the analyst estimates that the company's abnormal earnings growth for 2024 and beyond equals 3 percent annually.

On January 1, 2020, an analyst prepares the following forecasts for RENDERS INC.: 2020 2021 2022 2023 2024 Total Profit 50% 10% 4% 3% 3% Growth Payout Ratio 30% 50% 90% 90% 90% RENDERS INC's cost of equity equals 10 percent. Calculate the analyst's expected value-to-earnings ratio for RENDERS INC. on January 1, 2020 if the analyst estimates that the company's abnormal earnings growth for 2024 and beyond equals 3 percent annually.

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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Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $61.10 Using PE ratio Using P/CF ratio Using P/S ratio 3.35 8.12 31.20 2017 $67.00 4.06 8.92 36.20 $ $ 2018 $ 65.70 4.86 9.22 35.60 Share Price 0.17 0.11 2019 2020 $ 63.20 $ 84.70 5.56 7.85 10.97 12.31 39.10 50.30 2021 $100.10 8.85 13.44 58.30
Given the information below for HooYah! Corporation, compute the expected share price at the end of 2020 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2020. (Do not round intermediate calculations. Round your answers to 2 decimal places. Exclude negative annual PE and P/CFPS ratios from the average PE and average P/CFPS ratio calculations. When computing annual growth rates, use a positive sign on the annual rate of change if the per share value increased in value and use a negative sign on the annual rate of change if the per share value deceased in value.) Year Price EPS CFPS SPS 2014 $11.00 -7.00 -12.00 8,00 Using PE ratio Using P/CF ratio Using P/S ratio 2015 2016 $47.50 $119.00 -6.29 -9,50 16.50 -1.70 -2.70 19.60 Share Price 2017 $196.00 -.50 10 23.10 2018 $86.00 .07 18 26.60 2019 $16.50 0.06 00 24.95
Raghubhai
Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $ 56.90 2.50 7.32 34.80 Using PE ratio Using P/CF ratio Using P/S ratio 2017 $ 62.80 3.21 8.28 39.80 2018 $61.50 4.01 8.74 39.20 Share Price 2019 2020 $59.00 $ 80.50 7.05 11.83 53.90 4.71 10.17 42.70 2021 $95.90 8.05 13.12 61.90
Given the information below for HooYah! Corporation, compute the expected share price at the end of 2020 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2020. (Do not round intermediate calculations. Round your answers to 2 decimal places. Exclude negative annual PE and P/CFPS ratios from the average PE and average P/CFPS ratio calculations. When computing annual growth rates, use a positive sign on the annual rate of change if the per share value increased in value and use a negative sign on the annual rate of change if the per share value deceased in value.) 11111) Year 2014 2015 2016 2017 2018 2019 Price $ 20.00 $ 56.50 $ 128.00 $ 205.00 $ 95.00 $ 25.50 EPS -4.00 -3.29 -1.60 -.43 .06 .06 CFPS -11.00 -8.50 -2.60 -.15 .28 .08 SPS 17.00 25.50 24.10 27.60 31.10 33.95 Share Price Using PE ratio Using P/CF ratio Using P/S ratio
Raghubhai
Given the information below for HooYah! Corporation, compute the expected share price at the end of 2020 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2020. (Do not round intermediate calculations. Round your answers to 2 decimal places. Exclude negative annual PE and P/CFPS ratios from the average PE and average P/CFPS ratio calculations. When computing annual growth rates, use a positive sign on the annual rate of change if the per share value increased in value and use a negative sign on the annual rate of change if the per share value deceased in value.) Year 2014 2015 2016 2017 2018 2019 Price $ 20.00 $ 56.50 $ 128.00 $ 205.00 $ 95.00 $ 25.50 EPS -4.00 -3.29 -1.60 -.43 .06 .06 CFPS -11.00 -8.50 -2.60 -.15 .28 .08 SPS 17.00 25.50 24.10 27.60 31.10 33.95 Answer is complete but not entirely correct. Share Price Using PE ratio $ 91.12 Using P/CF ratio $ 54.98 X Using P/S ratio $ 131.06
A Residual Earnings Valuation (Easy) An analyst presents you with the following pro forma (in millions of dollars) that gives her forecast of earnings and dividends for 2013-2017. She asks you to value the 1,380 million shares outstanding at the end of 2012, when common shareholders' equity stood at $4,310 million. Use a required return for equity of 10 percent in your calculations. Earnings Dividends 2013E 388.0 115.0 2014E 570.0 160.0 2015E 599.0 349.0 2016E 629.0 367.0 2017E 660.4 385.4 Chapter 5 Accrual Accounting and Valuation: Pricing Book Values 169 a. Forecast book value, return on common equity (ROCE), and residual earnings for each of the years 2013-2017. b. Forecast growth rates for book value and residual earnings for each of the years 2014-2017. c. Calculate the per-share value of the equity from this pro forma. Would you call this a Case 1, 2, or 3 valuation? d. What is the premium over book value given by your calculation? What is the P/B ratio?
On 13th November 2019, Marks & Spencer’s CEO buys 100,000 shares of MKS at £185.5. Outline the key steps if you are using the market model to estimate the cumulative abnormal returns CAR (0, 60) event window related to this event.
Barton Industries expects next year's annual dividend, D1, to be $2.00 and it expects dividends to grow at a constant rate gL = 4.9%. The firm's current common stock price, P0, is $25.00. If it needs to issue new common stock, the firm will encounter a 4.0% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12.9% and the cost of old common equity is 12.4%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % What is the cost of new common equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Round your answer to two decimal places. %
Net Income for 2020 = 12,866 Average Stockholders Equity =(-3,116 + 3,299) / 2 = 91.50 hence Looking at the solution. Why is the 3,116 negative? I just wanted to make sure this was correct.
Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $81.90 $81.90 3.20 7.67. 64.00 Using PE ratio Using P/CF ratio Using P/S ratio 2017 $ 87.80 3.91 8.56 69.00 2018 $ 86.50 4.71 8.95 68.40 Share Price 2021 2019 2020 $84.00 $ 105.50 $ 120.90 7.40 8.40 12.04 13.26 83.10 91.10 5.41 10.52 71.90

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