Vonderboom Company just paid a dividend of $1.67 per share to its stocholders. Market analysts believe Vonderboom Company will grow by 19% next year, 13.75% the following year, and 13% the year after. Then, it is projected that Vonderboom Compnay will grow at a constant rate of 4.75% per year indefinitely. The current rate of interest on risk - free assets is 2.51 %, and the rate of return on market portfolio is 11.25 %. Vonderboom Company's beta is estimate to be 1.09. What is the estimate of the current market price of Vonderboom Company's stock?

Vonderboom Company just paid a dividend of $1.67 per share to its stocholders. Market analysts believe Vonderboom Company will grow by 19% next year, 13.75% the following year, and 13% the year after. Then, it is projected that Vonderboom Compnay will grow at a constant rate of 4.75% per year indefinitely. The current rate of interest on risk - free assets is 2.51 %, and the rate of return on market portfolio is 11.25 %. Vonderboom Company's beta is estimate to be 1.09. What is the estimate of the current market price of Vonderboom Company's stock?

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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Belotti Company just paid a dividend of $1.67 per share to its stockholders. Market analysts believe Belotti Company will grow by 19 percent next year, 13.75 percent the following year, and 13 percent the year after. Then, it is projected that Belotti Company will grow at a constant rate of 4.75 percent per year indefinitely. The current rate of interest on risk-free asset is 2.51 percent and the rate of return on market portfolio is 11.25 percent. Belotti Company’s beta is estimated to be 1.09. What is your estimate of the current market price of Belotti Company’ stock?
Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year. The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portman’s beta is 2.00. What is the dividents one year from now? What is the Horizon value? What is the Intrinsic value?
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Macro Systems just paid an annual dividend of $0.32 per share. Its dividend is expected to double for the next four years (D1 through D4), after which it will grow at a more modest pace of 1% per year. If the required return is 13%, what is the current price?
An analyst is trying to estimate the intrinsic value of the stock of ATR Kim Eng. The analyst estimates that ATR Kim Eng’s free cash flow during the next year will be P25 million. The analyst also estimates that the company’s free cash flow will increase at a constant rate of 7% a year and that the company’s WACC is 10%. ATR Kim Eng has P200 million of long-term debt and preferred stock and 30 million outstanding shares of common stock. What is the estimated per-share price of ATR Kim Eng’s common stock? Group of answer choices P21.11 P27.78 P34.43 P8.33
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News Corp is expected to pay a dividend of $0.8 in one year. The dividend is expected to grow at 12% in the following 3 years and then at a constant rate of 4% per annum indefinitely. If the required rate of return is 12%, what is the price of the company's share today? Please illustrate your answer using a timeline.

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