Zoom Enterprises expects that one year from now it will pay a total dividend of $5.1 million and repurchase $5.1 million worth of shares. It plans to spend $10.2 millionon dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost ofcapital is 12.3% and it has 4.9 million shares outstanding, what is its share price today?

Repurchase of shares from investors and paying dividends to investors will have same effect to…

Answered: Zoom Enterprises expects that one year…

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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CX Enterprises has the following expected dividends: $1.04 in one year, $1.22 in two years, and $1.34 in three years. After that, its dividends are expected to grow at 3.5% per year forever (so that year 4's dividend will be 3.5% more than $1.34 and so on). If CX's equity cost of capital is 11.8%, what is the current price of its stock? The price of the stock will be $0. (Round to the nearest cent.)
Zoom Enterprises expects that one year from now it will pay a total dividend of $4.5 million and repurchase $4.5 million worth of shares. It plans to spend $9.0 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is 13.5% and it has 4.9 million shares outstanding, what is its share price today?
Zoom Enterprises expects that one year from now it will pay a total dividend of $4.9 million and repurchase $4.9 million worth of shares It plans to spend $9.8 million on dividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases If Zoom's equity cost of capital is 12 5% and it has 5 4 million shares outstanding, what is its share price today? The price per share is $ (Round to the nearest cent)
Scarab Technologies is expected to generate $175 million in free cash flow next year, and FCF is expected to grow at a constant rate of 7% per year indefinitely. Scarab has no debt or preferred stock, and its WACC is 10%. If Scarab has 45 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent. How much is each share of common stock is worth dollars, according to the corporate valuation model?
White Lion Homebuilders has a current stock price of $27 per share, and is expected to pay a per-share dividend of $4.60 at the end of next year. The company’s earnings and dividends growth rate are expected to grow at a constant rate of 5.10% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 3.90% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be _____? (22.83%, 21.69%, 18.26%, or 26.25%) Please answer fast I give you like.
Shatin Intl. has 10 million shares, an equity cost of capital 12%, and is expected to pay a total dividend of $20 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $12 million of stock each year as well. How much will its stock price increase? The stock price will increase by $ (Round to the nearest cent.)
Mokoko Ltd. is considering a number projects and thus need to estimate its cost of capital in order to estimate their NPV. The company’s current dividend is $2.25 per share, which has grown steadily at 6% each year for over a decade and is expected to continue doing so. Its stock currently trades at $26 and there are 2 million shares outstanding. The company’s 100,000 preferred shares trade at $22 and pay annual dividends of $3. Cash and marketable securities on the company’s balance sheet total $30.5 million and the firm pays a tax rate of 30%. Their existing long-term debt (face value of $100 million, semi-annual payments) pays a 9.5% coupon and has 12 years remaining before maturity. Due to current conditions, the required rate of return (yield to maturity) on this debt is 11% and any new debt issuance would be required to offer the same yield to investors (there is no term premium for 1 year vs 12 year debt). What is Mokoko Ltd's Debt/Equity ratio? Assuming the firm wants to…
Lily Co. is expected to pay a dividend of $12 at the end of this year. The firm would like to issue new common stock to raise project funds but expects to incur flotation costs of 4%. The company's dividends are expected to grow at a constant rate of 6% indefinitely. Currently the stock is selling for $120. What is the after-tax cost of this firm’s equity? Assume a tax rate of 40%.
Scampini Technologies is expected to generate $100 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 50 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent. Each share of common stock is worth $ , according to the corporate valuation model.
XYZ corporation is expecting free cash flow of $100 million next year, and it will grow by 3% per year indefinitely afterward. XYZ’s discount rate is 12%. XYZ has $300 million worth of long term bonds outstanding, and 10 million shares of stock outstanding. What is a fair value for a share of XYZ? Do not include the $ sign and answer to the nearest $0.01.

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