points each) 1. The current stock price of a company is $58.32 per share. The company...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
points each) 1. The current stock price of a company is $58.32 per share. The company pays out 70% of their earnings per share. Given an ROE of 8.25% and a required rate of return of 9.45% estimate next year's earnings. 2. You are researching healthcare companies and note that investors in this industry require an 8.75% rate of return while valuing the average stock at 19.5x earnings. Your company appears to be growing at the same rate as peers (5.4% per year), however your plowback ratio is 10% higher than peers. Your company expects EPS of $4.62 next year - estimate the intrinsic value. points each) 1. The current stock price of a company is $58.32 per share. The company pays out 70% of their earnings per share. Given an ROE of 8.25% and a required rate of return of 9.45% estimate next year's earnings. 2. You are researching healthcare companies and note that investors in this industry require an 8.75% rate of return while valuing the average stock at 19.5x earnings. Your company appears to be growing at the same rate as peers (5.4% per year), however your plowback ratio is 10% higher than peers. Your company expects EPS of $4.62 next year - estimate the intrinsic value.
Expert Answer:
Answer rating: 100% (QA)
1 Current stock price 5832 Payout ratio 70 ROE 825 Rete... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The current stock price is 50. One period later, its value becomes three possible outcomes: {35,55, 60}. The value of $10 invested in the risk-free asset becomes $10.5 in one period. Find the upper...
-
Consider the following lease Term: 5 years Payments: annual at year end Year-1 rent: $54 per square foot per year Rent escalation: After the first year, rent payments are indexed to CPI Assuming...
-
The human resources department of a company is considering using a screening test as part of the hiring process for new employees and is analyzing the results of a recent study. It was found that 60%...
-
Calculate the Total Cost of Ownership of the following 2 models and determine which model is a better buy. Model X Model Y $50,000 $60,000 Purchase price = Expected useful life = Maintenance cost per...
-
How is the concept of matching usually applied to period costs?
-
What patient lives in Palm Rivers? a. Tierra Falls b. Ben Odepaul c. Susan Houghland d. Andre Marino TherapyCode Description 90901 92240 92507 92530 92540 95831 97010 97012 97014 97016 97018 97022...
-
In a non-replacement life test, 50 water turbines were put into continuous operation, and the first 3 failures occurred after 400,600, and 1,050 hours. (a) Assuming the exponential model, construct...
-
What are the components of the following systems? Draw and explain the configuration of each. (a) Barbershop (b) Car wash (c) Laundromat (d) Small grocery store
-
Prepare an income statement for Rex Manufacturing for the year ended December 31 using the following Information. Hint Not all Information given is needed for the solution. Finished goods inventory,...
-
Butler, Inc., operates at capacity and makes wooden playground equipment. Although Butlers swing sets and play forts are a matching set, they are sold individually and so the sales mix is not 1:1....
-
A taxpayer is most likely to materially participate in an activity a. when 10% of the rental property is owned by them b. that is their principal business c. this is from an estate or trust d. That...
-
What is brand loyalty? Why is it important to companies? What brands are you most loyal? Are there product categories where loyalty is stronger than for others?
-
Give an example of each of the various approaches to budgeting.
-
What are the functional and non-functional attributes of a Porsche? How are they different from a Corvette?
-
What makes a great campaign? How do you know?
-
Think of a popular consumer brand that you like, what type of research would you do before developing a campaign for that brand? How would you conduct it? What type of questions would you want to...
-
Identify and explain social and emotional benefit of a person continue to have an active sex life once they are older than 65ad health is linked to getting older, and this has an effect on the...
-
Big Jim Company sponsored a picnic for employees and purchased a propane grill equipped with a standard-sized propane tank for the picnic. To make sure there was enough propane for all the cooking...
-
Money has no intrinsic value. What does that mean?
-
Identify the four sectors in the food industry. For firms in each of the four sectors identify what they buy and what they sell. From what firms do they buy inputs; and, to what firms to they sell...
-
Calculate the arc elasticity of demand coefficient between point A and point B for the demand relationship to the right. Over this range is demand elastic or inelastic? Price $8 36 52 Quantity
-
For the Biot problem in a slab by expanding the sin and cos term and keeping only terms up to \(\lambda^{2}\) the following approximate relation can be obtained for the eigenvalues for small Biot...
-
A hot dog at \(5^{\circ} \mathrm{C}\) is to be cooked by dipping it in boiling water at \(100^{\circ} \mathrm{C}\). Model the hot dog as a long cylinder with a diameter of \(20 \mathrm{~mm}\). Find...
-
A finite cylinder is \(2 \mathrm{~cm}\) in diameter and \(3 \mathrm{~cm}\) long and at a temperature of \(200^{\circ} \mathrm{C}\), and is cooled in air at \(30^{\circ} \mathrm{C}\). The convective...
Study smarter with the SolutionInn App