Constanza Energy is an oil company with average risk. The average industry P/E ratio for oil companies is 10. If Constanza has earnings per share of $0.78, what would be a fair price for its stock?  

2.Company Z is currently priced at $42. They just reported earnings per share of $1.15. What is the P/E ratio that investors are willing to pay for a share of Company Z's stock? (Round to two decimalplaces.)

3.Teal Corp. has been having trouble. The last dividend was $2.82, and it's projected to fall 5% per year indefinitely. If the required return is 8%, what is Teal Corp.'s stock price? (Round to the nearestcent.)

4.A share of preferred stock has a par value of $10. It pays a 3% dividend. If the required return is 5%, what is the price of the stock? (Round to the nearest cent.)

5.Investors expect Bozo Inc. to grow at a constant 2% indefinitely. If the next dividend is expected to be $5.44 and the required return is 8.4%, what is the market price of Bozo? (Round to the nearestcent.)

6.What is the price of a share of stock if the beta is 2, its next dividend is projected to be $5, and its growth rate is expected to be a constant 7%, assuming the market return is 16% and the risk-free rate is 5%? (Round to the nearestcent.)

Answer rating: 100% (QA)

1 Fair price for Constanza Energy stock PE ratio Stock Price Earnings per share Given that the avera... View the full answer