Dole Food (NYSE: DOL) has a current dividend of $0.40, which is expected to grow at...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dole Food (NYSE: DOL) has a current dividend of $0.40, which is expected to grow at 7 percent forever. Felipe Rodriguez has estimated the required rate of return for Dole using three methods. The methods and the estimates are as follows: Bond yield plus risk premium method CAPM method APT method 7= 9.6% 7= 11.2% 7= 10.4% Using the assumed dividend pattern, what is the value of Dole Food using each of the three estimated required rates of return? Dole Food (NYSE: DOL) has a current dividend of $0.40, which is expected to grow at 7 percent forever. Felipe Rodriguez has estimated the required rate of return for Dole using three methods. The methods and the estimates are as follows: Bond yield plus risk premium method CAPM method APT method 7= 9.6% 7= 11.2% 7= 10.4% Using the assumed dividend pattern, what is the value of Dole Food using each of the three estimated required rates of return?
Expert Answer:
Answer rating: 100% (QA)
To calculate the value of Dole Food using each of the three estimated required ra... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
Students also viewed these accounting questions
-
The Aldridge Co. is expected to grow at 6% into the indefinite future. Its latest annual dividend was $2.50. Treasury bills currently earn 7% and the S&P 500 yields 11%. a. What price should Aldridge...
-
A firms earnings and dividends are expected to grow at a constant rate indefinitely, and it is expected to pay a dividend of $8.75 per share next year. Expected EPS and BVPS next year are $12 and...
-
What factors determine the required rate of return for any security?
-
Which of the following are valid in a Java file, listed in the order in which they are declared? (Choose two.) A. A package-private class declaration and a public interface declaration B. Two package...
-
Bill was severely injured when he was hit by a car while jogging. He spent one month in the hospital and missed three months of work because of the injuries. Total medical costs were $60,000. Bill...
-
In Problems 13 through 22, first verify that the given vectors are solutions of the given system. Then use the Wronskian to show that they are linearly independent. Finally, write the general...
-
We will use the Minitab macro BinoBP or R function binobp to nd the posterior distribution of the binomial probability when the observation distribution of Y is binomial(n,) and we have a beta(a, b)...
-
Consider FASB standards for reporting by private not-for-profit organizations and answer the following: a. What are the financial reports required of all not-for-profits? What additional report is...
-
Answer the question by showing the calculation procedure. Verified the answer by using the MATLAB coding. Submit all the answers (calculation procedure & MATLAB code) to MS Team. For all of the...
-
On May 2, 1988, Hannah Weather (Social Security number: 111-22- 3333) acquired residential real estate for $450,000. Of the cost, $100,000 was allocated to the land and $350,000 to the building. On...
-
On June 1st, 2020, Coca Cola (KO) issued bonds for one billion dollars. The bonds have a par value of $1,000, coupon rate of 2.75% payable semiannually, and 40 years maturity (maturity date:...
-
What is a call provision, and when are bonds typically called?
-
You have recently been hired by Delta Airlines to work in its strategy division. For each of the following, illustrate how Deltas supply curve for airline flights will be affected by drawing a graph...
-
Explain what 98% confidence means in a 98% confidence interval.
-
If a process removes heat from a system, must the system's temperature decrease in this process? Explain.
-
Is capital structure important to managers of not-for-profit businesses? Explain your answer.
-
Recently, you made multiple large purchases on your credit card totaling $17,700. The interest rate on your credit card is 15.4% per year, compounded monthly, and your statement says your minimum...
-
Frontland Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Frontland had to replace an inexperienced office worker in charge of bookkeeping because of...
-
Start with the partial model in the file Ch04 P24 Build a Model.xls on the textbook's Web site. A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call...
-
In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $900 million of retained earnings. The previous retained earnings were $855 million. How much in...
-
a. Describe briefly the legal rights and privileges of common stockholders. b. Use a pie chart to illustrate the sources that comprise a hypothetical company's total value. Using another pie chart,...
-
Using what you learned in this chapter of Dessler Human Resource Management, build on the companys new system by recommending two more specific career development activities the hotel should...
-
Many hotel jobs are inherently dead end; for example, maids, laundry workers, and valets, either have no great aspirations to move up, or are just using these jobs temporarily, for instance, to help...
-
Is there another incentive plan you think would work better for the pressers? Describe it.
Study smarter with the SolutionInn App