The Corrigan Company just paid a dividend of $1.28 per share, and that dividend is expected to grow at 15% for each of the next three years then at a constant rate of 3.5% per year in the future. The risk-free rate of interest is 3.50% and the current return on the Market 9.85%.Corrigan's current Beta was measured to be 1.15. What is the company's current stock price?

Cash Flows

B. Woodgate Inc. is considering a project with the following after-tax operating cash flow

What is the project's simple payback period?

(in millions of dollars):

Project

Year Cash Flow

0 -$500

1 175

2 150

3 150

4 125

The project has a Required rate of return of 10% and a reinvestment rate 7.5%

1. What is the project's simple payback period?

2. What is the project's NPV?

3. What is the project's IRR?

4. What is the project's MIRR?

Calculate Stock price based on Firm Value

C. An analyst has collected the following information about Franklin Electric:

EBIT and is expected to grow at 6% for the next year and expected to be $300 million.

Projected depreciation expense for the next year is $50 million.

Projected capital expenditures for the next year is $100 million.

Projected increase in operating working capital next year is $60 million.

Tax rate is 28%.

WACC or required return is 9.25%.

Market value of debt and preferred stock today is $500 million.

Number of common shares outstanding today is 20 million.

Calculate the firms Stock Price?

Answer rating: 100% (QA)

A Corrigan Company Stock Price Year 1 dividend 128 Growth rate for next 3 years 15 Growth rate after ... View the full answer