Sierra Adventures has a net income of $3 million this year. The book value of Sierra Adventures' common equity is $12 million. The company's dividend payout ratio is 50% and is expected to remain this way. What is Sierra Adventures' internal growth rate?
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Sierra Adventure has a net income of 3 million this year
![Sierra Adventures has a net income of
$3 million this year. The book value of
Sierra Adventures' common equity is
$12 million. The company's dividend
payout ratio is 50% and is expected to
remain this way. What is Sierra
Adventures' internal growth rate?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e45dbd5-7d62-42e5-8512-d0da52353d98%2F0f6bdbe3-3a51-47df-b286-8f9d4f2142c8%2Fgispwws_processed.jpeg&w=3840&q=75)
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- Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?Arts and Crafts, Inc. will pay a dividend of $4 per share in 1 year. It sells at $50 a share, and firms in the same industry provide an expected rate of return of 16%. What must be the expected growth rate of the company’s dividends?BM expects to pay a dividend of $8 next year and expects these dividends to grow at 3.15% a year. The price of IBM is $67 per share. What is IBM's cost of equity capital?
- Trend-Line Incorporated has been growing at a rate of 7% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $6 per share. If the market expects a 12% rate of return on Trend-Line, at what price must it be selling? If Trend-Line’s earnings per share will be $9 next year, what part of its value is due to assets in place? If Trend-Line’s earnings per share will be $9 next year, what part of its value is due to growth opportunities?What profit margin must the firm achieve ?Suppose the Pale Hose Corp. is expected to pay a dividend next year of OMR2.25 per share. Both sales and profits for Pale Hose are expected to grow at a rate of 20% for the following 2 years and then at 5% per year thereafter indefinitely. Dividend growth is expected to match sales growth. If the required return is 15%, what is the value of a share of Pale Hose?
- Company Z's earnings and dividends per share are expected to grow indefinitely by 4% a year. Assume next year's dividend per share is $17 and next year's EPS is $5. The market capitalization rate is 14%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $5 a share. How much is the market actually paying per share for growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value growth opportunitiesCompany Z's earnings and dividends per share are expected to grow indefinitely by 3% a year. Assume next year's dividend per share is $12 and next year's EPS is $6. The market capitalization rate is 9%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $6 a share. Question: How much is the market actually paying per share for growth opportunities?Can you answer this accounting question?
- Ramble On Co. wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.49, and a dividend payout ratio of 52 percent. The ratio of total assets to sales is constant at 1.34. What profit margin must the firm achieve?IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 3.92% a year. The price of IBM is $75 per share. What is IBM's cost of equity capital?Company Z's earnings and dividends per share are expected to grow indefinitely by 3% a year. Assume next year's dividend per share is $12 and next year's EPS is $5. The market capitalization rate is 10%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $5 a share. How much is the market actually paying per share for growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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