In dollars and cents, what is the fair value of a stock that has just paid...

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In dollars and cents, what is the fair value of a stock that has just paid a dividend of $7.54, which is expected to grow indefinitely at 1.88% pa, and that has a cost of capital of 9.36%? b. If the historical dividend yield of a stock is 4.62% and the stock's cost of capital is 10.82%, what is its expected growth rate in percentage terms to 2 decimal places? c. In dollars and cents, what is the maximum you would pay per share for a company that: o generated profits of $3.50 per share o on its 1,464,960,000 shares o from which it paid a dividend of $0.92 per share and o has equity capital of $51bn o if its cost of capital is 8.35% ? (1 mark) e. In dollars and cents, what is the maximum you would pay per share for a company that: o generated profits of $2.695 per share had 765 million shares on issue o had just paid a dividend of $2.02 per share o that according to its accounts has equity capital of $13.45bn o has a standard deviation is 47.81%, o where the standard deviation of the market is 18.94%, o where the return of the market is 8.65%, o where the stock's correlation with the market is 0.85 and o the risk-free rate of return is 3.60%? (2 marks) g. In dollars and cents, what is the maximum price you would pay for the shares of a company that had the operating cash flow and capital expenditure over the next four years provided in the table below when: • Your estimated value of the company in the fourth year, when you planned to sell your shares in the company is $984m o the weighted average cost of capital of the company is 13.78%, o its value of debt is $272m and • there are 40m outstanding shares? (3 marks) In dollars and cents, what is the fair value of a stock that has just paid a dividend of $7.54, which is expected to grow indefinitely at 1.88% pa, and that has a cost of capital of 9.36%? b. If the historical dividend yield of a stock is 4.62% and the stock's cost of capital is 10.82%, what is its expected growth rate in percentage terms to 2 decimal places? c. In dollars and cents, what is the maximum you would pay per share for a company that: o generated profits of $3.50 per share o on its 1,464,960,000 shares o from which it paid a dividend of $0.92 per share and o has equity capital of $51bn o if its cost of capital is 8.35% ? (1 mark) e. In dollars and cents, what is the maximum you would pay per share for a company that: o generated profits of $2.695 per share had 765 million shares on issue o had just paid a dividend of $2.02 per share o that according to its accounts has equity capital of $13.45bn o has a standard deviation is 47.81%, o where the standard deviation of the market is 18.94%, o where the return of the market is 8.65%, o where the stock's correlation with the market is 0.85 and o the risk-free rate of return is 3.60%? (2 marks) g. In dollars and cents, what is the maximum price you would pay for the shares of a company that had the operating cash flow and capital expenditure over the next four years provided in the table below when: • Your estimated value of the company in the fourth year, when you planned to sell your shares in the company is $984m o the weighted average cost of capital of the company is 13.78%, o its value of debt is $272m and • there are 40m outstanding shares? (3 marks)

Answer rating: 100% (QA)

a In dollars and cents the fair value of the stock is 12739 Given Dividend D1 754 Expected growth ra... View the full answer