Question: 1. A firm is expected to generate return on equity of 13.2% in the next year. It is expected to generate EPS of $4.69 in
1. A firm is expected to generate return on equity of 13.2% in the next year. It is expected to generate EPS of $4.69 in the next year. It maintains a constant payout ratio of 45%. If the cost of equity is 11.86%, what is the price of the firm's shares?
2. A firm is expected to generate an EPS of $1.17 over the next year, and this is expected to grow at a constant rate of 3.8% in perpetuity. It maintains a constant payout ratio of 65%. If the cost of equity is 9.6%, what is the present value of growth opportunities?
3. A firm is expected to generate return on equity of 10.1% in the next year. It is expected to generate EPS of $3.15 in the next year. It maintains a constant plowback ratio of 45%. If the cost of equity is 10.345%, what is the price of the firm's shares?
4. A firm is expected to generate an EPS of $1.92 over the next year, and this is expected to grow at a constant rate of 3.6% in perpetuity. It maintains a constant plowback ratio of 40%. If the cost of equity is 7.5%, what is the present value of growth opportunities?
5. A firm is expected to generate return on equity of 11.7% in the next year. It is expected to generate EPS of $4.17 in the next year. It maintains a constant payout ratio of 45%. If the cost of equity is 11.435%, what is the price of the firm's shares?
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