Question: Practice Assignment #7 13. If the target PE ratio for a firm is 12 earnings per share is $4.00 and dividends per share is $2.00,

Practice Assignment #7 Practice Assignment #7 13. If the target PE ratio for a firm

13. If the target PE ratio for a firm is 12 earnings per share is $4.00 and dividends per share is $2.00, then the stock price of the firm is: a, $15 b. $24 c. $48 d. $50 e. none of the given answers 14. Company A is expected to pay an year-end dividend of $5 (D)share of its common stock. After the dividend payment the stock is expected to sell at $115 per share. The required rate of return on the common stock is 25%. Then the current price of the stock is: a. $110 b. $120 c. $100 d. $96 e. none of the given

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1)Here are data on two stocks, investor required return is 15 percent: Stock A Return on Equity 12% Earnings Per Share $2.00 Dividends per share $1.00 Stock B Return on Equity 10% Earnings Per Share...

DuPont Analysis 2019 2018 (Profitability) Net Profit Margin % Net Earnings $xxx.xox $11,242 XX.XX% 10.20% 10.28 % Total Sales Revenue $54,392 Sxxx,xxx X (Efficiency) Total Assets Turnover Ratio net...

1. Market price is not the same as book value or liquidation value. 2. At each point in time all securities of the same risk are priced to offer the same expected rate of return. 3. If the market is...

5. If the dividend yield for year 1 is expected to be 5% based on the current price of $25, what will the year 4 dividend be if dividends grow at a constant 6% ? 7. Common stock can be valued using...

6. The value of common stock will likely decrease if: A. the investment horizon decreases. B. the growth rate of dividends increases. C. the discount rate increases. D. dividends are discounted back...

Your supervisor needs some help performing financial analysis concerning two companies? TELUS Corporation (TU) and CGI Inc. (GIB). She asked you to: 1. Download each company's annual income...

8. What constant-growth rate in dividends is expected for a stock valued at $32.00 if next year's dividend is forecast at $2.00 and the appropriate discount rate is 13% ? A. 5.00% B. 6.25% C. 6.75%...

Please help with the attached questions as soon as possible Question 1 George and The Man then visit Bloom Lake Railway. Their junior corporate analyst, Sam, is considering upgrading their station...

Please see the attached question and I need assistant on some of the questions. I have $45 tutor credits but I can't assign more than this amount for this homework help. Thanks Question 1 George and...

1. What is the plowback ratio for a firm that has earnings per share of $20.00 and pays out $4.00 per share as dividends? 2. What would be the approximate expected price of a stock when dividends are...

complete the following requirements : Date Units Cost per unit $10 January 1 Purchases 20 Units January 5 Purchases 10 Units $15 January 10 Purchases 25 Units $20 January 15 Purchases 20 Units $25...

Prove that the linear transformation S is invertible. Then find a formula for the inverse linear transformation, S-1, by employing a matrix inverse. S: P1 M1,2, S (a + bx) = [3a + b 2a + b]

As a consequence of the efficient market hypothesis: one should probably practice passive investing. speculative bubbles are impossible. one should not invest in the stock market. stock markets are...

in computer science, what is the CIS recommendation for password history? 1 3 3 5 2 4 3 3 0 8 4 5 0 1 6 6 0 6

4. The desire to maximize profits can work against racial and other types of discrimination. To see this, consider two equally productive accountants named Ted and Jared. Ted is black, and Jared is...

1. In 2015, Forbes magazine listed Bill Gates, the founder of Microsoft, as the richest person in the United States. His personal wealth was estimated to be $76 billion. Given that there were about...

14. Use a demand-and-supply model to explain the impact of occupational segregation or crowding on the relative wage rates and earnings of men and women. Who gains and who loses from the elimination...