The earnings, dividends, and stock prices are expected to grow at 7% per year in the future. Common stock sells for $23 per share its last dividend was $2.00 and the company will pay a dividend of $2.14 at the end of the current year. Using the discounted cash flow approach, what is the equity?
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- 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.…The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 4% per year in the future. Shelby's common stock sells for $21 per share, its last dividend was $2.00, and the company will pay a dividend of $2.08 at the end of the current year. Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places. % If the firm's beta is 1.8, the risk-free rate is 7%, and the expected return on the market is 10%, then what would be the firm's cost of equity based on the CAPM approach? Round your answer to two decimal places. % If the firm's bonds earn a return of 9%, 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. % 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. Round your answer…The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7%per year in the future. Shelby’s common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of thecurrent year.a. Using the discounted cash flow approach, what is its cost of equity?b. If the firm’s beta is 1.6, the risk-free rate is 9%, and the expected return on themarket is 13%, what will be the firm’s cost of equity using the CAPMapproach?c. If the firm’s bonds earn a return of 12%, what will rs be using the bond-yieldplus-risk-premium approach? (Hint: Use the midpoint of the risk premiumrange.)d. On the basis of the results of parts a through c, what would you estimateShelby’s cost of equity to be
- Provide Answer with calculation and explanationI need help with questions a-dThe current dividend of Best Food Org. is $2.31 and is expected to grow at 11.00% for seven years. After the first seven years, the growth rate of the dividends expects to grow at a constant 4.71% into the future. If the cost of equity is 8.6%, what is the number or value that you need to use in CF7 in Excel or Financial Calculator when discounting the cash flow? $116.30 $133.89 $121.10 $135.
- A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells for $87. A. What is the total rate of return on the stock? B. What are the dividend yield and percentage capital gain? C. Now suppose the year-end stock price after the dividend is paid is $72. What are the dividend yield and percentage capital gain in this case?Please helpThe next dividend payment by Savitz, Inc., will be $1.64 per share. The dividends are anticipated to maintain a growth rate of 8 percent forever. The stock currently sells for $31 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Enter your answer as a percent.) Dividend yield % а. b. Capital gains yield %
- What rate of return is implied by the current market value of this Financial Accounting Question?The next dividend payment by Savitz, Inc., will be $1.48 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. The stock currently sells for $27 per share. a. What is the dividend yield? b. What is the expected capital gains yield?The next dividend payment by Savitz, Inc., will be $1.76 per share. The dividends are anticipated to maintain a growth rate of 7 percent forever. The stock currently sells for $34 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Enter your answer as a percent.) % % a. Dividend yield b. Capital gains yield