Beagle Beauties engages in the development, manufacture, and sale of a line ofcosmetics designed to make your dog look glamorous. Below you will findselected information necessary to compute some valuation estimates for the firm.Assume the values provided are from year-end 2021. Also assume that the firm'sequity beta is 1.60, the risk-free rate is 2.25 percent, and the market risk premiumis 7 percent.Dividends per shareReturn on equityBook value per share$ 2.109.50%2021 value per shareAverage price multipleForecasted growth rate$ 17.50EarningsCash FlowSales$ 5.0013.1013.51%$ 6.609.4511.38%$ 25.652.397.21%a. What are the sustainable growth rate and required return for Beagle Beauties?Note: Do not round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.Sustainable growth rateRequired return%%b. Using these values, estimate the current share price of Beagle Beauties stockaccording to the constant dividend growth model.Note: Do not round intermediate calculations. Round your answer to 2decimal places.Share price

Dividend per share$2.10Return on equity9.50%Book value per share$17.50Beta1.60Risk-free…

Answered: Beagle Beauties engages in the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous, Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2021. Also assume that the firm's equity beta is 1.60, the risk-free rate is 2.50 percent, and the market risk premium is 6 percent. Dividends per share Return on equity Book value per share 2021 value per share i Average price multiple Forecasted growth rate Sustainable growth rate Required return $ 2.40 8.50% $19.75 Earnings $ 5.00 13.10 13.66% Share price Cash Flow $ 6.40 9.60 11.238 a. What are the sustainable growth rate and required return for Beagle Beauties? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. 4.42% Sales $25.65 2.54 % 7.074 View previous attempt b. Using these values, estimate the current share price of Beagle Beauties stock according…
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2021. Also assume that the firm's equity beta is 1.40, the risk-free rate is 2.75 percent, and the market risk premium is 7 percent. Dividends per share Return on equity Book value per share 2021 value per share Average price multiple Forecasted growth rate $ 2.04 9.50% $ 17.05 Earnings $ 5.00 13.10 13.48% Cash Flow $ 6.60 9.42 11.41% Sales $ 25.65 2.36 7.34% The sustainable growth rate is 5.624 percent, and the required return is 12.55 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Share price
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year - end 2021. Also assume that the firm's equity beta is 1.40, the risk - free rate is 2.60 percent, and the market risk premium is 8.0 percent. Dividends per share $ 2.44 Return on equity 10.50% Book value per share $ 20.05 Earnings Cash Flow Sales 2021 value per share $ 5.00 $ 6.40 $ 25.65 Average price multiple 13.10 9.62 2.56 Forecasted growth rate 13.68% 11.21% 7.39% Using the PE, P/CF, and P/S ratios, estimate the 2022 share price for Beagle Beauties. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. DO NOT USE EXCEL please leave a key for the formula thank you
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2021. Also assume that the firm's equity beta is 1.50, the risk-free rate is 2.70 percent, and the market risk premium is 7.0 percent. Dividends per share Return on equity Book value per share 2021 value per share Average price multiple Forecasted growth rate $ 2.28 9.50% $18.85 Using PE ratio Using P/CF ratio Using P/S ratio Earnings $5.00 13.10 13.60% Share Price Cash Flow $6.30 9.54 11.29% Using the PE, P/CF, and P/S ratios, estimate the 2022 share price for Beagle Beauties. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Sales $25.65 2.48 7.37%
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2021. Also assume that the firm's equity beta is 1.20, the risk-free rate is 2.65 percent, and the market risk premium is 7.0 percent. Dividends per share Return on equity Book value per share 2021 value per share Average price multiple Forecasted growth rate $ 2.26 9.50% $ 18.70 Earnings $ 5.00 Cash Flow Sales $ 6.30 $ 25.65 13.10 9.53 2.47 13.59% 11.30% 7.23% Using the PE, P/CF, and P/S ratios, estimate the 2022 share price for Beagle Beauties. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Using PE ratio Using P/CF ratio Using P/S ratio Share Price
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm’s equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk premium is 9.0 percent. Dividends per share $ 2.18 Return on equity 11.50 % Book value per share $ 18.10 Earnings Cash Flow Sales 2019 value per share $ 5.00 $ 6.50 $ 25.65 Average price multiple 13.10 9.49 2.43 Forecasted growth rate 13.55 % 11.34 % 7.22 % Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm’s equity beta is 1.20, the risk-free rate is 2.65 percent, and the market risk premium is 7.0 percent. Dividends per share $ 2.26 Return on equity 9.50 % Book value per share $ 18.70 Earnings Cash Flow Sales 2019 value per share $ 5.00 $ 6.30 $ 25.65 Average price multiple 13.10 9.53 2.47 Forecasted growth rate 13.59 % 11.30 % 7.23 % Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties.
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm's equity beta is 1.20, the risk-free rate is 2.15 percent, and the market risk premium is 5.0 percent. Dividends per share Return on equity Book value per share 2019 value per share Average price multiple Forecasted growth rate $2.06 Using PE ratio Using P/CF ratio. Using P/S ratio 7.50% $17.20 Earnings Cash Flow $5.00 13,10 Share Price 13.49% $6.00 9.43 11.40% sales $25.65 Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 2.37 7.15%
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm's equity beta is 1.20, the risk-free rate is 2.15 percent, and the market risk premium is 5.0 percent. Dividends per share Return on equity Book valué per share 2019 value per share Average price multiple Forecasted growth rate $2.06 Share price 7,50% $17.20 Earnings Cash Flow $5.00 13.10 13.49% $6.60 9.43 11.40% Sales $25.65 2.37 7.15% The required return is 8.15 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual Income model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm's equity beta is 1.50, the risk-free rate is 2.45 percent, and the market risk premium is 6.0 percent. Dividends per share Return on equity Book value per share 2019 value per share Average price multiple Forecasted growth rate $ 2.38 8.50% $19.60 Using PE ratio Using P/CF ratio Using P/S ratio Earnings Cash Flow $5.00 $6.40 13.10 13.65% 9.59 11.24% Using the PE, P/CF, and P/S ratios, estimate the 2020 share price for Beagle Beauties. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Share Price Sales $25.65 2.53 7.19%
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm's equity beta is 1.30, the risk-free rate is 2.55 percent, and the market risk premium is 8.0 percent. Dividends per share Return on equity Book value per share $ 2.42 10.50% $19.90 Earnings $5.00 Cash Flow $6.40 Sales $25.65 2019 value per share The required return is 12.95 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share price
Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from year-end 2019. Also assume that the firm's equity beta is 1.60, the risk-free rate is 2.25 percent, and the market risk premium is 7.0 percent. Dividends per share Return on equity Book value per share $ 2.10 9.50% $17.50 2019 value Average price multiple Forecasted growth rate Earnings $ 5.00 13.10 13.51% Cash Flow $ 6.60 9.45 11.38% Sales $25.65 2.39 7.21% The required return is 13.45 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) * Answer is complete but not entirely correct. Share price S 27.91 X

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