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? answer
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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? answer
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- 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 $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?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?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?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?
- IBM expects to pay a dividend of $8 next year and expects these dividends to grow at 4.17% a year. The price of IBM is $74 per share. What is IBM's cost of equity capital?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 opportunitiesSuppose that sales and profits of Oly Enterprises are growing at a rate of 30% per year. At the end of four years the growth rate will drop to a steady 4%. At the end of year 5, Oly will pay its first dividend in the amount of $2 per share. If the required return is 16%, what is the value of a share of stock? Assume dividends grow at the same rate as earnings after year 4.
- you expect kt industries (kti) will have earnings per share of $4.6 this year and expect that they will pay out $1.59 of these earnings to shareholders in the form of a dividend. kti's return on new investments is 10%, and their equity cost of capital is 16%. ... kti's dividend growth rate is % (round to two decimal places) if kti's dividend growth rate will remain constant, and kti's next year dividend is $1.69. then kti's current stock price should be $ (round to two decimal places)A firm is expected to pay an annual dividend of $2.40 per share next year. The market price of stock is $75.25 and the growth rate is 2.5%. What is the cost of equity?Company Z's earnings and dividends per share are expected to grow indefinitely by 2% a year. Assume next year's dividend per share is $20 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.)