**Projected Dividends for Bravo Company****Problem Statement:**Analyze dividends, EPS, and stock prices using the following information about Bravo Company:- The company recently paid a dividend of $1.18.- Projected growth rate for dividends is 13% annually for the next five years.- Industry benchmark PE ratio is 20.- Bravo Company's payout ratio is 45%.- Required return is 13%.**Objective:**Calculate the projected dividends for each of the next five years.**Instructions:**- Use the information provided to project dividends.- Do not round intermediate calculations.- Round final answers to two decimal places (e.g., 12.34).**Table for Projection Entries:**| Year | Projected Dividend ||------|--------------------|| Year 1 | || Year 2 | || Year 3 | || Year 4 | || Year 5 | |This structured approach helps in estimating future financial outcomes based on growth rates, payout ratios, and industry standards. **EPS and Stock Price Calculations**1. **What is the EPS in five years?** - *Instruction:* Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34. - *Input Field:* EPS in 5 years2. **What is the target stock price in five years?** - *Instruction:* Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34. - *Input Field:* Stock price in 5 years3. **What is the stock price today?** - *Instruction:* Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34. - *Input Field:* Stock price todayThese questions are designed to help you calculate future financial metrics, specifically the Earnings Per Share (EPS) and stock prices. Ensure your calculations maintain accuracy by following the rounding instructions provided.

D01.18Growth rate13%Benchmark PE20Payout ratio45%Required rate of return13%

Answered: Solve dividends EPS and stock prices…

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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Jia's Fashions recently paid a R2 annual dividend. The company is projecting that its dividends will grow by 20 percent next year, 12 percent annually for the two years after that, and then at 6 percent annually thereafter. Based on this information, how much should Jia's Fashions common stock sell for today if her required return is 10.5%? Which answer is correct? A. R54.90 B. R60.80 C. R66.60 D. R69.30
An analyst has gathered the following information for the Oudin Corporation: Expected earnings per share = €5.49 Expected dividends per share = €2.13 Dividends are expected to grow at 2.53 percent per year indefinitely The required rate of return is 7.74 percent Based on the information provided, compute the price/earnings multiple for Oudin (Enter your answer as a number with two decimal places, like this: 12.34)
Carnes Cosmetics Co.'s stock price is $50, and it recently paid a $1.75 dividend. This dividend is expected to grow by 19% for the next 3 years, then grow forever at a constant rate, g; and rs = 15%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8% per year in the future. Shelby's common stock sells for $26 per share, its last dividend was $2.00, and the company will pay a dividend of $2.16 at the end of the current year. a. Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places. 16.31 % b. If the firm's beta is 1.1, the risk-free rate is 9%, and the expected return on the market is 14%, then what would be the firm's cost of equity based on the CAPM approach? Round your answer to two decimal places. 14.50% c. If the firm's bonds earn a return of 11%, then what would be your estimate of rs using the own-bond-yield-plus-judgmental-risk-premium approach? (Hint: Use the mid-point of the risk premium range.) Round your answer to two decimal places. 14 % d. On the basis of the results of parts a-c, what would be your estimate of Shelby's cost of equity? Assume Shelby values each approach equally.…
BUMMER MAN, INC stock paid a current dividend $8 per share and this dividend is expected to grow at a rate of 28% for the first three years and then slow to a rate of 4% for the forseeable future, the interest rate is 10%. What is the current price? Write down the formula with appropriate numbers inserted to solve the problem along with the correct answer.
Tin-Tin Waste Management, Inc., is growing rapidly. Dividends are expected to grow at rates of 30 percent, 35 percent, 25 percent, and 18 percent over the next four years. Thereafter, management expects dividends to grow at a constant rate of 7 percent. The stock is currently selling at $46.48, and the required rate of return is 18.0 percent. Compute the dividend for the current year (D0). (Round intermediate calculations and final answer to 2 decimal places Riker Departmental Stores management has forecasted a growth rate of 40 percent for the next two years, followed by growth rates of 25 percent and 20 percent for the following two years. It then expects growth to stabilize at a constant rate of 7.5 percent forever. The firm paid a dividend of $3.46 recently. If the required rate of return is 18 percent, what is the current value of Riker's stock? (Round intermediate calculations and final answer to 2 decimal place You own a company that competes with Old World DVD Company.…
Company A announced that its current dividend is $4 per share (D0=$4). The dividend is expected to grow at a constant rate of 5 percent a year for the next 2 years and it will be 2 percent thereafter. Required rate of return is equal to 10%. What is the expected price of the stock at the end of the first year? (Answer is rounded)
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Solve dividends EPS and stock prices using the information that follows. Bravo Company just paid a dividend of $1.26. A growth rate for dividends is expected to be 11% over the next five years. The benchmark PE for this industry is 21. Bravo Company has a payout ratio of 45%. The required return is 13%. What are the projected dividends for each of the next five years? What is the target stock price in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34.) What is the stock price today? Please answer fast I give upvote
Suppose that a firm's recent earnings per share and dividend per share are $3.10 and $2.10, respectively. Both are expected to grow 7 percent. However, the firm's current P/E ratio of 30 seems high for this growth rate. The P/E ratio is expected to fall to 26 within five years. Compute the dividends over the next five years. (Do not round intermediate calculations. Round your answers to 3 decimal places Years First year Second year Third year Fourth year Fifth year Dividends Compute the value of this stock in five years. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price
Give typing answer with explanation and conclusion Huang Company's last dividend was $1.55. The dividend growth rate is expected to be constant at 22.5% for 3 years, after which dividends are expected to grow at a rate of 4% forever. If the firm's required return (rs) is 12%, what is its current stock price? Do not round intermediate calculations.
You expect a company to pay a dividend of 2.50 next year and 3.50 a share for the following 2 years. At that point, you expect that the dividend will increase by 4% every year. If your required return is 8%, what would you pay for the stock today? USE EXCEL

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