Question 7 FLAG QUESTION Ice Boat Adventures (IBA) has 10,000,000 shares outstanding and a market capitalization of $525,000,000. What is IBA's equity cost of capital if you expect the share price in one year to be $60.50 after paying a dividend of $3.50? (1 (express as a % rounded to 1 digit after the decimal: x.x%) Answers 1 - 1

Question 7 FLAG QUESTION Ice Boat Adventures (IBA) has 10,000,000 shares outstanding and a market capitalization of $525,000,000. What is IBA's equity cost of capital if you expect the share price in one year to be $60.50 after paying a dividend of $3.50? (1 (express as a % rounded to 1 digit after the decimal: x.x%) Answers 1 - 1

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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Problem 4 (Allocation of Cash Dividends to Preference and Ordinary Shareholders) The Company has the same capital structure (except for retained earnings) for the past five year, see details below: 6% Preference Share Capital, 80,000 shares issued and outstanding, P 50 par P4,000,000 Ordinary Share Capital, 200,000 shares issued and outstanding, P 30 par 6,000,000 Retained Earnings 5,000,000 No dividends were paid prior to 2020 for two years. On December 10, 2020, the Company declared P 1,500,000 as cash dividends to shareholders of record of December 21, 2020, payable on January 5, 2021. Requirements: Prepare all the necessary journal entries to record the dividend transactions. Allocate the dividends between ordinary shareholders and preference shareholders if: Case A. Preference share capital is NON-CUMULATIVE and…
Question 2 (a) Hovid Berhad is evaluating two common shares for the firm's new investment. Given below the information of the shares. • Thelmin paid a RM1.50 dividend last year. The dividend growth at 4 percent per year indefinitely. • Tocovid expected to pay a RM1.60 per share dividend at the end of the year. The dividend gowth at 8 percent per year indefinitely. If the investor required rate of return is 12 percent calculate the value for both common shares.
Question 10 (2 points) A firm has 1 million shares outstanding. After-tax earnings have been constant at $5 per share. The firm retains 40% of earnings and pays out the rest in dividend. The shareholder's required rate of return is 15%. Calculate the current share price. $50 $20 $30 $10 $40
QUESTION 3 CER Corporation has 8.75 million shares of common stock outstanding, 215,000 sharesof RM6 annual dividend preferred stock outstanding, and 105,000 of 7.5% semi-annualbond outstanding. The common stock is currently sells for RM34 per share and has abeta of 1.25, the preferred stock currently sells for RM91 per share, and the bonds have15 years to maturity and sell for 93% of par. The market risk premium is 8.5%, T-bills areyielding 5%, and corporate tax rate is 35%. Calculate the following:(a) Firm’s market value capital structure.(b) Cost of equity.(c) Cost of preferred stock Thank you
Consider that the probability of a reference entity defaulting during a year conditional on no earlier defaults to be 2%; assume that defaults always happen halfway through a year; payments made on a CDS are made once a year, at the end of the year; assume the risk-free rate is 5% with continuous compounding and the recovery rate is 40%. We will value a new credit default swap. We are buying protection on an entity. CDS is 3- years. What is the required spread for a new issue? A. 103.63bps B. 98.32bps C. 132.53bps D. 124.49bps
Esc Chapter 12 Practice Problems 1. Suppose a stock had an initial price of $77 per share, paid a dividend of $1.35 per share during the year, and had an ending share price of $83. Compute the percentage total return. Q Search 1 Q A N @ 2 W S F2 X # 3 E F3 D $ 4 R F DII % 5 F5 T G * F6 A 6 Y B * H & 7 PrtScn U N * 8 Home 1 M 9 Page K End о F10 ) 0 PgUp F11 P
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PB-17 Nonconstant Dividends (LOI) Lohn Corporation is expected to pay the following dividends over the next four years $14 $10 $9, and $5 Atened, the company pledges to maintain a comment 6 percent growth rate in dividends forever the required return on the stock is 14 percent what is the current share price? Mule Cha 5442 968.24 10020 $45.70 $73.42
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Question 5 FLAG QUESTION 1 Scooter Madness (SM) has 10,000 shares outstanding and is expected to have Net Income of $70,000 in year 1. SM expects to retain 35% of its earnings to invest in projects at the end of year 1. If the expected share price 1 year from today after any dividend issued is $65 and SM's return on equity capital is 16%, what would you expect the share price to be today? (round to the nearest cent: $x.xx) Answers 1-1 1. VERSION 2M.6.4 Previous

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