Q: What will be the nominal RoR on a perpetual preferred stock with a $100 par value, a stated dividend…
A: Par value = $100 Dividend rate = 7% Annual dividend = 100*0.07 = $7
Q: What is the current price of a share of stock when the current dividend is P5, the growth rate is…
A: Under dividend growth model, the current price of stock can be calculated as follows:…
Q: In the cell , by using cell references to the given data, calculate the value of stock A. Stock A…
A: Next dividend (D1) = $1.20 Growth rate (g) = 8% Required return (r) = 13%
Q: What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a…
A: Computation:
Q: PREFERRED STOCK RATE OF RETURN What will be the nominal rate of return on a per- petual preferred…
A: Nominal rate of return = Dividend / Current market price Where, Dividend = Par Value * Dividend Rate…
Q: What is the rate of return on a preferred stock that has a par value of $50, a market price of…
A: Given details are : Par value of preferred stock = $50 Market price of preferred stock = $46.50…
Q: What rate of return should you expect to earn on an investment in the stock described below if you…
A: Equity financing is the most used financing by the companies because the risk of repayment is less.…
Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…
A: This question require us to compute the nominal rate of return on a preferred stock from following…
Q: Stock A has a capital gains yield of 10% and a dividend yield of 4%. Stock B has a capital gains…
A: The return that a security must generate to satisfy the expectations of investor is called required…
Q: n the cell, by using cell references to the given data, calculate the value of stock B. Stock B…
A: D1 = $4 Let dividend growth rate = g and required return = Re g = 5% Re = 15%
Q: Find the dividend yield for a stock that pays an annual dividend of $1.28 per share and has a…
A: Dividend Yield = Annual Dividend / Current Price
Q: In the cell, by using cell references to the given data, calculate the value of stock D. Stock D…
A: Expected dividend next year = D = $6 Growth rate = g = 8% Required return = Re = 9%
Q: Suppose a stock had an initial price of $35.19 per share, paid a dividend of $2.26 per share during…
A: Given information in question Current price =$35.19 Dividend paid=$2.26 Ending price=$33.6
Q: .Consider stock XYZ. If the current book value is 100, the current earnings per share is 10, the…
A: Given, Current Book Value = 100 Current Earnings per share = 10 Growth Rate =3% Discount Rate = 13%…
Q: gs per share equal $4, in what price range you estimate its stock should be selling?
A: SOLUTION:- 7-14 Present value (PV) = sum of present value of all future cash flows Assuming returns…
Q: Calculate the nominal rate of return on a perpetual preferred stock with a par value of $200, a…
A: Annual coupon = (9 / 100) * 200 = 18 Annual rate = (Annual coupon / price) * 100 Annual rate = (18 /…
Q: Suppose rRF = 4%, rM = 12%, and bi = 1.6. What is ri, the required rate of return on Stock i? Round…
A: In the given question we require to calculate the required return on Stock i : As per Capital assets…
Q: Consider the following information for a stock index: Current index is 400 Dividend yield is 3% pa…
A: A European call option is a version of an options contract that does not allow the investor to…
Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…
A: according to CAPM model: rs=rf+beta×rm-rfwhere,rs=expected returnrf=risk free raterm=market risk…
Q: Determine the market value of a Digicel Stock if D0 = 3.00, Ks = 13%, G = 6%.
A: according to Gordon growth model, Price of stock =D0×1+gKs-g where, D0= current dividend g= growth…
Q: What is the formula for Price to Book Value ( MV/BV) ratio ? If Current Price = 126, Total Equity =…
A: The “Price/Book Value” Ratio (P/BV) is calculated by dividing the price of a share of stock by the…
Q: If flotation cost is 1%, what is the cost of preferred stock that sells for $84 per share and has a…
A: given, F = 1% Price = $84 face value = $100 yield = 6.2%
Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…
A: The provided information are: Expected returnrL=8%=0.08Risk-free raterRF=3%=0.03Market…
Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…
A: Given details are : Par value = $100 Dividend rate = 8% Dividend amount = $100 * 8% = $8 Current…
Q: How do you calcuate the bechmark and historical return for the stock ARKK when the last price listed…
A: Examining historical return can give an understanding into how a security or market has responded to…
Q: Perferred Stock Rate of Return. What is the normal rate of return on a peretual perferred stock with…
A: Formula:
Q: In the cell, by using cell references to the given data, calculate the value of stock C. Stock C…
A: Next dividend = $0.65 Growth rate = 10% Required return = 14% Let stock's value = P
Q: State Dep Rec Prob 0.1 0.3 Return 0.04 0.18
A: The expected return is the weighted probabilistic rate of return that is realized on stock…
Q: Share commom stock dividend is $1.00 , g=5.4 and required return is 11.4%, What is the stock price?
A: Current Divided (D0) = 1 Growth rate(g) =5.40% Required return (k)=11.40% Current stock price =…
Q: the company's common stock has a beta, β, of 1.2. The risk-free rate is 6%, and the market return is…
A: Beta (β) = 1.2 Risk free rate (Rf) = 0.06 Market return (Rm) = 0.11 Cost of common equity (rs) = ?…
Q: Suppose that the initial dividend on a stock is £1. The interest rate is 3 percent and the growth…
A: Initial dividend (D1) = £1 Interest rate (r) = 3% Growth rate (g) = 2%
Q: What is the value of Safeco stock when the required return is 14 percent?
A: As per the Dividend Discount Model, the value of a stock is discounted value of future dividends.…
Q: f flotation cost is 1%, what is the cost of preferred stock that sells for $84 per share and has a…
A: Preferred Stock is financial security used by entities to raise fund and holders get two…
Q: What is the current price of a share of stock when last year’s dividend was P3, the growth rate is…
A: To calculate the current price of stock we will use the below formula Current price of stock =…
Q: A stock has a market price of $33.45 and pays a $.95 dividend. What is the dividend yield?
A: Stock market = price Dividend =0.95 Dividend Yield= Annual dividend / price per share
Q: What is the price of a stock with an annual dividend of $30, required return on equity of 10%, and…
A: Stock price = dividend * (1+growth ) / (Required return - growth)
Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…
A: As per CAPM, Return on portfolio = risk free rate + beta * (return on market - risk free rate)
Q: Cost of common stock equity: CAPM Brigham Jewellery Corporation common stock has a beta, β, of 1.8.…
A: CAPM estimates the expected return on an investment given its systematic risk. CAPM finds the cost…
Q: The rate of net investment is 50t /3 and capital stock at t 0 is 100. Find the capital stock…
A: Given:Rate of net investment is:I= 50t23Capital stock (K0) at t =0 is 100To compute:Capital Stock…
Q: What is the price of a share today if dividend today (D0) is $5, discount rate (R) 10%, and dividend…
A: Dividend Growth Model: Also known as GGM (Gordon Growth Model), it is a model that helps a…
Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…
A: Calculation of beta
Q: (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of…
A: Annual dividend per share (D) = $8.00 Required return (r) = 0.15 Value of a preferred stock (P0) = ?…
Q: What is the current price of a share of stock when the current dividend is P4.75, the growth rate is…
A: As per Gordon model, Current price of stock or P0 = D1/(r - g) where D1 is the dividend yet to be…
Q: What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a…
A: Nominal rate of return (r) refers to the current dividend yield of an instrument. Dividend yield =…
Q: A stock has earned $3.54 per share before dividends. They have a DPR of 35%. Similar stocks have P/E…
A: Earning before Dividend =$3.54 DPR =35% P/E ratio = 15.30 Expected Target Price if company earns…
determine the market value of a stock if D=3.00, K=13%, G=6%
Step by step
Solved in 2 steps
- Determine the market value of a Digicel Stock if D0 = 3.00, Ks = 13%, G = 6%.The rate of net investment is 50t/3 and capital stock at t = 0 is 100. Find the capital stock function.Following is information for two stocks: Investment r σ Stock X 8% 10% Stock Y 24% 36% Which stock has the greater relative risk? (show the computation of the relative risk for X & Y.)
- What is the formula for Price to Book Value ( MV/BV) ratio ? If Current Price = 126, Total Equity = 20.000.000E , and number of shares =2.000.000 %3D compute the P/ BV and interpret it.Find Cost of common stock if risk free rate is 7, beta 1.3 and market return 13%. Find Cost of common stock if risk free rate is 14, beta 1.6 and market return 15%.Find Cost of common stock if risk free rate is 7, beta 1.3 and market return 13%. II
- When is it possible, the Stock price of a REIT to be $9 while its Net Present Value (NAV) to be $10?Suppose rRF = 4%, rM = 12%, and bi = 1.6. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. %Astromet is financed entirely by common stock and has a beta of 1.20. The firm pays no taxes. The stock has a price-earnings multiple of 11.0 and is priced to offer a 10.9% expected return. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yields a risk-free 4.6%. Calculate the following: Required: a. The beta of the common stock after the refinancing b. The required return and risk premium on the common stock before the refinancing c. The required return and risk premium on the common stock after the refinancing d. The required return on the debt e. The required return on the company (i.e, stock and debt combined) after the refinancing If EBIT remains constant: f. What is the percentage increase in earnings per share after the refinancing? g-1. What is the new price-earnings multiple? g-2. Has anything happened to the stock price? Complete this question by entering your answers in the tabs below. Reg A to E Reg F to G2…
- b. Compute Pa (price of the stock today) under Plan B. Note Dg will be equal to De x (1 + g) or $2.60 (1.05). Ke will be equal to 8 percent, and g will be equal to 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan B c. Which plan will produce the higher value? O Plan A O Plan BThe return of stock B is __% The volatility of stock A is __% The volatility of stock B is __%The Price-Earning ratio (P/E) of stock A, B, C are 5, 3, 7 respectively. Which one you should buy?