Question: ToolWerks Company is expected to earn 10 million next year

ToolWerks Company is expected to earn $10 million next year. There are 2 million shares outstanding and the company uses a dividend payout ratio of 40 percent. The required rate of return for companies like ToolWerks is 8 percent. The current share price of ToolWerks is $75.
a. What are the expected earnings per share for ToolWerks?
b. What are the expected dividends per share for ToolWerks?
c. What is the dividend growth rate expected for ToolWerks?
d. What is the present value of growth opportunities for this firm?

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  • CreatedFebruary 25, 2015
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