Residual Income Valuation MethodSuppose that BKE has the following:Year +1Year +2Year +3Year +4Year +5Year +6Common shareholders' equity atbeginning of year$4,223.13 $4,557.87 $ 4,683.21 $ 4,802.33 $5,001.22 $ 5,503.76Comprehensive income availablefor common shareholders1,668.76 $1,717.54 $ 1,902.22 $ 1,988.34 $2,003.45Their required rate of return is 9.25%Their long run growth rate is 4.20%They have 750 M shares of stock.Market Based Valuation MethodsSuppose that BKE has the following:BKEPrice$87.21Number of shares (K)64,575Book value of equity K$588,324EPS6.75

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Answered: Residual Income Valuation Method…

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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Net Sales COGS Depreciation EBIT Interest Taxable Income Taxes Net Income 2019 Income Statement Dividends Additions to Retained Earnings 147 647.74 3,456 1,895 235 1,326 320 1,006 211.26 794.74
Compute NET Profit margin ratio Income Statement ($M) 2019 Revenue 372 Depreciation Other Operating Expense 12 271 Income Before Taxes 89 Тахes 23 66 20 Net Income Dividends Earnings per share Dividends per share Common Shares Outstanding 0.72 0.22 92
Using the average multiples for P/E, P/B and P/S, which company will you buy? Show computations to support your decision.
Estimating Share Value Using the DCF Model Following are forecasts of Home Depot's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of February 3, 2019, which the company labels fiscal 2018. Module Forecast Horizon Period Reported Terminal $ millions 2018 2019 2020 2021 2022 Period Sales $108,203 $115,777 $123,882 $132,553 $141,832 $144,669 12,073 12,967 13,875 14,846 15,885 16,203 25,546 27,332 29,245 31,292 33,483 34,152 NOPAT NOA Answer the following requirements assuming a discount rate (WACC) of 7.85%, a terminal period growth rate of 2%, common shares outstanding of 1,105 million, net nonoperating obligations (NNO) of $27,424 million. Required a. Estimate the value of a share of Home Depot's common stock using the discounted cash flow (DCF) model as of February 3, 2019. Note: Do not round until your final answer; round your final answer to two decimal places. Stock price per share: $ 519 b. Home Depot stock closed at $190.06 on March 28, 2019, the…
Costs per Equivalent Unit and Production Costs The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $52,800 of direct materials. ACCOUNT Work in Process-Forging Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Nov. 1 Bal., 5,500 units, 70% completed 60,885 30 Direct materials, 50,000 units 465,000 525,885 30 Direct labor 46,910 572,795 30 Factory overhead 64,784 637,579 30 Goods finished, 2 units 30 Bal., 4,400 units, 80% completed Based on the above data, determine each of the following amounts. If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar. a. Cost of beginning work in process inventory completed in November. b. Cost of units transferred to the next department during November. c. Cost…
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Selected ratios formulars Unilever 2021 BOPP 2021 ROCE PBIT / net assets * 100 (32,424/39,406 *100 = - 82% 102,154 / 192,758 *100 =53% Net Assets Turnover Revenue / Net Assets 526,912 / 39,406 = 13 times 214,174 / 192,758 = 1 time Gross Profit Margin Gross profit / revenue *100 97,046 / 526,912 *100 18.4% 115,462 / 214,174 * 100 54% Net Profit Before Tax PBT / revenue * 100 (35,005) / 526,912* 100 = -6.6% 104,778 / 214,174* 100 =48.9% Current Ratio Current assets / current liabilities 214,665/341,171 = 0.5 139,104 / 30,368 = 4.5 Quick Ratio Current assets – inventory / current liabilities 214,665-91,627 /341,171 = 0.4 139,104 -13,248/ 30,368 = 4.1 Inventory Days Inventory / cost of sales * 365 days 91,627/ 429,866 *365 = 77 days 13,248 / 101,397 *365 = 47 days Receivable Days Receivables / cost of sales * 365 days 24,515 / 429,866 *365 =20 days 92,860 / 101,397 *365 =334 days Payable Days…
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(Profitability Ratio)What is the Earnings Per Share in 2019?
6
Ex.18.

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