Derry Corporation is expected to have an EBIT of $2,750,000 next year. Depreciation, the increasein net working capital, and capital spending are expected to be $210,000, $115,000, and $215,000,respectively. All are expected to grow at 20 percent per year for four years. The company currentlyhas $16,000,000 in debt and 825,000 shares outstanding. After Year 5, the adjusted cash flow fromassets is expected to grow at 2.6 percent, indefinitely. The company's WACC is 8.9 percent and thetax rate is 21 percent. What is the price per share of the company's stock?Please show your work for this question.

A company's share price, sometimes called stock price, is simply the cost of buying one single…

Answered: percent, indefinitely. The company's…

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percent, indefinitely. The company's WACC What is the price per share of the company's stock? ark for this question

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

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q7- Which of the following statements is true? Select one: a. Trailing P/E is based on the current share price and forward P/E is based on next year's forecast share price. b. Trailing P/E is based on last year's share price and forward P/E is based on the current share price. c. Both trailing and forward P/E are based on the current share price. d. Trailing P/E is based on last year's share price and forward P/E is based on next year's forecast share price. Clear my choice
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If RGD Corporation earned P1.50 per shahre last year and its stock traded at P30 per share , what should the corporation's stock trade for if it earns P2 per share this year? a. P35 b. P40 c. P50 d. P60
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E Ltd's stock purchases during a recent week were as follows: Day Price per unit ($) Units purchased 1 1.45 55 1.60 80 1.75 120 4 1.80 75 1.90 130 There was no stock at the beginning of the week. 420 units were issued to production during the week. The company updates its stock records after every transaction.
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Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 44. Assume that the current market price of Zigi, Inc. stock is $54.59. If Zigi, Inc. just paid a dividend of $4.57per share (i.e., D0 = 4.57), and if investors expect that the company’s dividends will grow at an annual rate of2.47% forever, then Zigi, Inc.’s required rate of return is ____%. (Record your answer rounded to 1 decimalplace; for example, record 18.29654% as 18.3).45. Phillips, Inc. just paid a dividend of $3.25 per share on its common stock (that is, D0 = 3.25). Investors expectthe dividend to grow at 45% in years 1 and 2, they expect the dividend to grow at 25% in year 3 and theyexpect that all future dividends (that is, dividends in years 4, 5, ..., infinity) to grow at a constant rate of 5%per year. If the cost of capital for Phillips, Inc. stock is 18%, what is the current price of the stock?
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