A share of Bauer Bowties Inc. common stock is expected to pay a dividend of $1.18...

 

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A share of Bauer Bowties Inc. common stock is expected to pay a dividend of $1.18 at the end of this year. If the expected long-run growth rate for this stock is 2.40%, and if investors' required rate of return is 10.00% what is the appropriate stock price today (give me the price to the penny)? Labrador technologies Inc. plans to become public soon. The current owners need to know the value of each share of common equity so they price their shares correctly. The WACC for this firm is 16.00% and there are 65,518 common shares outstanding. The firm has $1,635,091 in preferred equity and its outstanding debt has a market value of $3,272,701. Use the DCF valuation model based on the expected FCFs shown below; year 1 represents one year from today and so on. The company expects to grow at a 2.1% rate after Year 5. Rounding to the nearest penny, what is the value of each share of common stock? Period Year 1 Year 2 Year 3 Year 4 Year 5 Free Cash Flow $1,312,930 $1,282,298 $1,764,472 $2,473,860 $3,538,140 A share of Bauer Bowties Inc. common stock is expected to pay a dividend of $1.18 at the end of this year. If the expected long-run growth rate for this stock is 2.40%, and if investors' required rate of return is 10.00% what is the appropriate stock price today (give me the price to the penny)? Labrador technologies Inc. plans to become public soon. The current owners need to know the value of each share of common equity so they price their shares correctly. The WACC for this firm is 16.00% and there are 65,518 common shares outstanding. The firm has $1,635,091 in preferred equity and its outstanding debt has a market value of $3,272,701. Use the DCF valuation model based on the expected FCFs shown below; year 1 represents one year from today and so on. The company expects to grow at a 2.1% rate after Year 5. Rounding to the nearest penny, what is the value of each share of common stock? Period Year 1 Year 2 Year 3 Year 4 Year 5 Free Cash Flow $1,312,930 $1,282,298 $1,764,472 $2,473,860 $3,538,140

Answer rating: 100% (QA)

1 To calculate the appropriate stock price for Bauer Bowties Inc we can use the Gordon Growth Model also known as the Dividend Discount Model DDM Stoc... View the full answer