The data for questions 28 through 36 is at the bottom of the Exhibit spreadsheet labelled...
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The data for questions 28 through 36 is at the bottom of the Exhibit spreadsheet labelled Exhibit II. PACCAR is a manufacturer of trailer-truck cabs and demand for cabs is cyclical. PACCAR shares are currently priced at $101. Data for fiscal 2022, which ends on December 31, is forecast and you believe the 2012 to 2022 data reasonably reflects profitability over a business cycle [in reality it likely does not]. The Rate of Return required on PACCAR common is estimated at 8.50%. Using the data from 2012 through 2022, calculate normalized EPS for PACCAR using the average EPS. Round to 1 cent. Normalized EPS: Based on the normalized EPS, what is the PE Ratio? Round to 2 decimal places. PE Ratio: What is the average Return on Equity, or ROE, for PACCAR? Round to 2 decimal places or 1 basis point. Note the critical format for ROE is EPS, / Book Value or Net Income, / Common Equity... Average ROE: Calculate a normalized EPS forecast for fiscal 2023 using the average ROE and round to 1 cent. Normalized EPS based on ROE: Based on the normalized EPS forecast for 2023 using average ROE, what is the PE Ratio? Round to 2 decimal places. PE Ratio: 6 The data for questions 28 through 36 is at the bottom of the Exhibit spreadsheet labelled Exhibit II. PACCAR is a manufacturer of trailer-truck cabs and demand for cabs is cyclical. PACCAR shares are currently priced at $101. Data for fiscal 2022, which ends on December 31, is forecast and you believe the 2012 to 2022 data reasonably reflects profitability over a business cycle [in reality it likely does not]. The Rate of Return required on PACCAR common is estimated at 8.50%. Using the data from 2012 through 2022, calculate normalized EPS for PACCAR using the average EPS. Round to 1 cent. Normalized EPS: Based on the normalized EPS, what is the PE Ratio? Round to 2 decimal places. PE Ratio: What is the average Return on Equity, or ROE, for PACCAR? Round to 2 decimal places or 1 basis point. Note the critical format for ROE is EPS, / Book Value or Net Income, / Common Equity... Average ROE: Calculate a normalized EPS forecast for fiscal 2023 using the average ROE and round to 1 cent. Normalized EPS based on ROE: Based on the normalized EPS forecast for 2023 using average ROE, what is the PE Ratio? Round to 2 decimal places. PE Ratio: 6 Calculate PACCAR's Residual Income per share for 2021 and round to one cent. 2021 Residual Income per share: Calculate PACCAR's Residual Income per share for 2022 and round to one cent. 2022 Residual Income per share: You forecast future Returns on Equity as shown on the Exhibit. Beginning in 2023, ROE is expected to decline to 16% and then proceed through a cycle and reach a steady state, long-term ROE of 15% in 2028. PACCAR's payout ratio is forecast to remain at 50% in the future. The consensus Rate of Return on PACCAR common is 8.50%. At the end of the forecast horizon, the premium of intrinsic value over book value is forecast to be 40%. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Rather than forecast the premium of intrinsic value over book value, Book Value is forecast to grow at a constant 2.50% beginning in 2029. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Calculate PACCAR's Residual Income per share for 2021 and round to one cent. 2021 Residual Income per share: Calculate PACCAR's Residual Income per share for 2022 and round to one cent. 2022 Residual Income per share: You forecast future Returns on Equity as shown on the Exhibit. Beginning in 2023, ROE is expected to decline to 16% and then proceed through a cycle and reach a steady state, long-term ROE of 15% in 2028. PACCAR's payout ratio is forecast to remain at 50% in the future. The consensus Rate of Return on PACCAR common is 8.50%. At the end of the forecast horizon, the premium of intrinsic value over book value is forecast to be 40%. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Rather than forecast the premium of intrinsic value over book value, Book Value is forecast to grow at a constant 2.50% beginning in 2029. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: [in millions except per share data] Yr Ending 12-31 EPS; Earnings/Share Regular Dividend per Share Extra Dividend per Share Common Equity Shares Outstanding 2022F 2021 2020 2016 2015 2014 2013 2012 $1.48 $4.51 $3.82 $3.30 $3.12 $6.80 $5.32 $3.74 $1.39 $1.34 $1.28 $1.50 $0.70 2019 2018 2017 $6.87 $6.24 $4.75 $1.28 $1.09 $0.99 $2.30 $2.00 $1.20 $0.96 $0.92 $0.88 $0.80 $0.78 $0.60 $1.40 $1.00 $0.70 $0.80 $3.58 $3.09 $2.19 $1.56 $2.32 $1.86 $1.70 $1.58 |$12,893.5$11,437.4 $10,390.0 $9,706.1 $8,592.9 $8,050.5 $6,777.6 $6,940.4 $6,753.2 $6,634.3 $5,846.9 351.8 355.6 356.1 355.2 355.8 $2.84 $1.98 347.8 348.4 347.4 347.5 351.8 352.9 The data for questions 28 through 36 is at the bottom of the Exhibit spreadsheet labelled Exhibit II. PACCAR is a manufacturer of trailer-truck cabs and demand for cabs is cyclical. PACCAR shares are currently priced at $101. Data for fiscal 2022, which ends on December 31, is forecast and you believe the 2012 to 2022 data reasonably reflects profitability over a business cycle [in reality it likely does not]. The Rate of Return required on PACCAR common is estimated at 8.50%. Using the data from 2012 through 2022, calculate normalized EPS for PACCAR using the average EPS. Round to 1 cent. Normalized EPS: Based on the normalized EPS, what is the PE Ratio? Round to 2 decimal places. PE Ratio: What is the average Return on Equity, or ROE, for PACCAR? Round to 2 decimal places or 1 basis point. Note the critical format for ROE is EPS, / Book Value or Net Income, / Common Equity... Average ROE: Calculate a normalized EPS forecast for fiscal 2023 using the average ROE and round to 1 cent. Normalized EPS based on ROE: Based on the normalized EPS forecast for 2023 using average ROE, what is the PE Ratio? Round to 2 decimal places. PE Ratio: 6 The data for questions 28 through 36 is at the bottom of the Exhibit spreadsheet labelled Exhibit II. PACCAR is a manufacturer of trailer-truck cabs and demand for cabs is cyclical. PACCAR shares are currently priced at $101. Data for fiscal 2022, which ends on December 31, is forecast and you believe the 2012 to 2022 data reasonably reflects profitability over a business cycle [in reality it likely does not]. The Rate of Return required on PACCAR common is estimated at 8.50%. Using the data from 2012 through 2022, calculate normalized EPS for PACCAR using the average EPS. Round to 1 cent. Normalized EPS: Based on the normalized EPS, what is the PE Ratio? Round to 2 decimal places. PE Ratio: What is the average Return on Equity, or ROE, for PACCAR? Round to 2 decimal places or 1 basis point. Note the critical format for ROE is EPS, / Book Value or Net Income, / Common Equity... Average ROE: Calculate a normalized EPS forecast for fiscal 2023 using the average ROE and round to 1 cent. Normalized EPS based on ROE: Based on the normalized EPS forecast for 2023 using average ROE, what is the PE Ratio? Round to 2 decimal places. PE Ratio: 6 Calculate PACCAR's Residual Income per share for 2021 and round to one cent. 2021 Residual Income per share: Calculate PACCAR's Residual Income per share for 2022 and round to one cent. 2022 Residual Income per share: You forecast future Returns on Equity as shown on the Exhibit. Beginning in 2023, ROE is expected to decline to 16% and then proceed through a cycle and reach a steady state, long-term ROE of 15% in 2028. PACCAR's payout ratio is forecast to remain at 50% in the future. The consensus Rate of Return on PACCAR common is 8.50%. At the end of the forecast horizon, the premium of intrinsic value over book value is forecast to be 40%. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Rather than forecast the premium of intrinsic value over book value, Book Value is forecast to grow at a constant 2.50% beginning in 2029. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Calculate PACCAR's Residual Income per share for 2021 and round to one cent. 2021 Residual Income per share: Calculate PACCAR's Residual Income per share for 2022 and round to one cent. 2022 Residual Income per share: You forecast future Returns on Equity as shown on the Exhibit. Beginning in 2023, ROE is expected to decline to 16% and then proceed through a cycle and reach a steady state, long-term ROE of 15% in 2028. PACCAR's payout ratio is forecast to remain at 50% in the future. The consensus Rate of Return on PACCAR common is 8.50%. At the end of the forecast horizon, the premium of intrinsic value over book value is forecast to be 40%. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: Rather than forecast the premium of intrinsic value over book value, Book Value is forecast to grow at a constant 2.50% beginning in 2029. Calculate the Intrinsic Value of a share of common and round to one cent. IV₂: [in millions except per share data] Yr Ending 12-31 EPS; Earnings/Share Regular Dividend per Share Extra Dividend per Share Common Equity Shares Outstanding 2022F 2021 2020 2016 2015 2014 2013 2012 $1.48 $4.51 $3.82 $3.30 $3.12 $6.80 $5.32 $3.74 $1.39 $1.34 $1.28 $1.50 $0.70 2019 2018 2017 $6.87 $6.24 $4.75 $1.28 $1.09 $0.99 $2.30 $2.00 $1.20 $0.96 $0.92 $0.88 $0.80 $0.78 $0.60 $1.40 $1.00 $0.70 $0.80 $3.58 $3.09 $2.19 $1.56 $2.32 $1.86 $1.70 $1.58 |$12,893.5$11,437.4 $10,390.0 $9,706.1 $8,592.9 $8,050.5 $6,777.6 $6,940.4 $6,753.2 $6,634.3 $5,846.9 351.8 355.6 356.1 355.2 355.8 $2.84 $1.98 347.8 348.4 347.4 347.5 351.8 352.9
Expert Answer:
Answer rating: 100% (QA)
Normalized EPS 720 PE Ratio 1291 Average ROE 1627 Normalized EPS based on ROE 750 PE Ratio 1335 ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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