You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred- dividend-earned ratio for the past three years from the following data taken from the firm's financial statements: Year 20x1 20X2 20X3 Operating income $18,000,000 $16,000,000 $15,000,000 Interest 9,100,000 6,600,000 5,200,000 Таxes 5,100,000 4,100,000 4,400,000 Preferred dividends 1,300,000 1,000,000 800,000 Common dividends 2,400,000 3,000,000 Round your answers to two decimal places. 20X1: 20X2: 20X3: What does your analysis indicate about the firm's capacity to pay preferred stock dividends? Times preferred dividend earned has -Select- v each year, which indicates the firm's capacity to pay the dividend has -Select-

You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred- dividend-earned ratio for the past three years from the following data taken from the firm's financial statements: Year 20x1 20X2 20X3 Operating income $18,000,000 $16,000,000 $15,000,000 Interest 9,100,000 6,600,000 5,200,000 Таxes 5,100,000 4,100,000 4,400,000 Preferred dividends 1,300,000 1,000,000 800,000 Common dividends 2,400,000 3,000,000 Round your answers to two decimal places. 20X1: 20X2: 20X3: What does your analysis indicate about the firm's capacity to pay preferred stock dividends? Times preferred dividend earned has -Select- v each year, which indicates the firm's capacity to pay the dividend has -Select-

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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ok Suppose Wacken, Limited just issued a dividend of $2.52 per share on its common stock. The company paid dividends of $2.02. $2.09, $2.26, and $2.36 per share in the last four years. If the stock currently sells for $71, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Cost of equity using arithmetic growth rate Cost of equity using geometric growth rate 4.96 % 5.68 %
You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred-dividend-earned ratio for the past three years from the following data taken from the firm’s financial statements: Year 20X1 20X2 20X3 Operating income $ 14,000,000 $ 13,000,000 $ 13,000,000 Interest 4,600,000 3,200,000 4,600,000 Taxes 3,700,000 5,100,000 3,900,000 Preferred dividends 1,200,000 1,200,000 1,500,000 Common dividends 2,100,000 3,100,000 — Round your answers to two decimal places. 20X1: 20X2: 20X3: What does your analysis indicate about the firm’s capacity to pay preferred stock dividends? Times preferred dividend earned has each year, which indicates the firm's capacity to pay the dividend has .
Please show work in Excel.
Question 1: Suppose you own 100 shares of General Motors stock, and the company earned $6 per share during the last reporting period. Suppose also that GM could either pay all of its earnings out as dividends (in which case you would receive $600) or retain the earnings in the business, buy more assets, and cause the price of the stock to increase by $6 per share (in which case the value of your stock would rise by $600). a. How would the tax laws influence what you, as a typical stockholder, would want the company to do? b. Would your choice be influenced by how much other income you had? Why might the desires of a 35-year-old doctor differ with respect to corporate dividend policy from the desires of a retiree living on a small income? c. How might the corporation’s decision with regard to the dividends it pays influence the price of its stock?
You are considering investing in Henderson Engineers Ltd. The book value of shareholders' equity is $40,0000,000. The firm has made a net profit of $ 660,000 for the year ending 30 June 2023. The earnings per share is $1.30. You also find the PE ratio for firms similar to Henderson is 12. a) What is the book value per share for Henderson Engineers Ltd? b) What price would you expect Henderson shares to sell for? c) Explain would you invest in this share and why.
Suppose Wacken, Limited just issued a dividend of $2.60 per share on its common stock. The company paid dividends of $2.10, $2.17, $2.34, and $2.44 per share in the last four years. If the stock currently sells for $79, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Cost of equity using arithmetic growth rate Cost of equity using geometric growth rate % %
S Suppose Wacken, Limited just issued a dividend of $2.61 per share on its common stock. The company paid dividends of $2.11, $2.18, $2.35, and $2.45 per share in the last four years. If the stock currently sells for $80, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Cost of equity using arithmetic growth rate Cost of equity using geometric growth rate % %
Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.92. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is ☐ %. (Round to two decimal places.)
1) John made the following investments in Stock A. Calculate his money-weighted return earned over the 5- year period. The cost of equity for Stock A is 10% p.a. Balance from previous year New investment by investor Net balance at beginning of year Investment return for the year Investment gains or (loss) Withdrawal by investor Balance at end of year 1 0 100 100 -50% -50 0 50 2 50 950 1000 35% 350 -350 1000 3 1000 0 1000 27% 270 0 1270 4 1270 230 1500 10% 150 -150 1500 5 1500 0 1500 20% 300 -1800 0
Assume that you are consulting the board of directors for a start-up firm. The firm is expecting small profits and possible losses in the next couple of years, but significant growth over the next 10 years. They have asked your opinion on a dividend policy for the firm. In your initial post, provide your opinion on a dividend policy along with reasoning using terminology and business factors discussed in this module.
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years: Year 1 Year 2 Year 3 Year 4 High price $ 99.70 $ 123.30 $ 132.70 $ 149.33 Low price 74.53 90.64 71.32 117.85 EPS 8.98 10.73 11.81 13.20 Earnings are projected to grow at 9 percent over the next year. a. What is your high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is your low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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