**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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I have 2 questions that I need help with. 1.Problem 8-15 Value of Dividends and Future Price (LG8-5) A firm is expected to pay a dividend of $2.45 next year and $2.60 the following year. Financial analysts believe the stock will be at their price target of $95 in two years. Compute the value of this stock with a required return of 12.4 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2. Problem 8-17 Dividend Growth (LG8-5) Annual dividends of ATTA Corp grew from $0.82 in 2005 to $1.31 in 2017. What was the annual growth rate? (Round your answer to 2 decimal places.)
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Global Logistics just announced it is increasing its annual dividend to $1.46 next year and will increase that dividend by 2.11 percent annually thereafter. How much will one share of this stock be worth ten years from now if the required rate of return is 13.1 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Suppose that a firm's recent earnings per share and dividend per share are $2.55 and $1.40, respectively. Both are expected to grow at 11 percent. However, the firm's current P/E ratio of 15 seems high for this growth rate. The P/E ratio is expected to fall to 11 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
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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
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 stock of Alpha Tool sells for $70.20 per share. Its current dividend rate, D0, is $2 per share. Analysts and investors expect Alpha to increase its dividends at a 30 percent rate for each of the next 2 years. This annual dividend growth rate is expected to decline to 26 percent for years 3 and 4 and then to settle down to 24 percent per year forever. Calculate the cost of internal equity for Alpha Tool. Use Table II for your calculations. Round your answer to the nearest whole number. %
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.…
FatEx is planning to pay dividends of $1.20, $2.60, $3.00, and $4.50 in years 1 through 4, respectively. Starting in year 5, it will pay the dividends of $3.50 a year forever. If the required return is 6%, how much is the stock worth today? answer is 55.73 , please dont use excel
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.
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