You have found the following historical information for the Daniela Company over the past four years: Year 2 Year 3 Stock price EPS Year 1 $ $62.12 $71.34 $65.25 52.50 2.80 2.92 3.20 3.45 Year 4 Earnings are expected to grow at 21 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price one year from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock price

You have found the following historical information for the Daniela Company over the past four years: Year 2 Year 3 Stock price EPS Year 1 $ $62.12 $71.34 $65.25 52.50 2.80 2.92 3.20 3.45 Year 4 Earnings are expected to grow at 21 percent for the next year. Using the company's historical average PE as a benchmark, what is the target stock price one year from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Target stock price

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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Boehm Incorporated is expected to pay a $2.20 per share dividend at the end of this year (i.e., D1 = $2.20). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 17%. What is the estimated value per share of Boehm's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
A stock had the following year-end prices and dividends. What is the geometric average annual return on this stock Time Price Dividend 0 $23.19 ? 1 $24.90 $0.23 2 $23.18 $0.24 3 $24.86 $0.25
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nces A firm is expected to pay a dividend of $1.35 next year and $1.50 the following year. Financial analysts believe the stock will be at their price target of $40 in two years. Compute the value of this stock with a required return of 11.3 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Value of stock
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Meadow Dew Corporation currently has an EPS of $4.00, and the benchmark PE for the company is 39. Earnings are expected to grow at 5 percent per year. a. What is your estimate of the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the target stock price in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Assuming the company pays no dividends, what is the implied return on the company's stock over the next year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Current stock price b. Target stock price c. Implied return of stock %
The stock of Business Adventures sells for $30 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Boom Normal economy Recession Dividend $ 2.00 1.40 0.50 Required: a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation Answer is complete and correct. Stock Price $ 40 34 25 14.33 22.60 Expected return Standard deviation b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % % Answer is complete but not entirely correct. 8.75 11.30 % %
An analyst gathered the following information for a stock and market parameters: stock beta = 1.23; expected return on the Market = 9.32%; expected return on T-bills = 4.75%; current stock Price = $9.08; expected stock price in one year = $13.1; expected dividend payment next year = $3.8. Calculate the expected return for this stock. Please share your answer as a percentage rounded to 2 decimal places.
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