Tets limited is a multi- national company. The company's current year dividend is Shs.1.56 per share and is expected to grow by 3% annually.What is the approximate cost of equity (ke) if the stock is currently trading at Shs.28 a share?
Q: Alibaba Group has a share price of $25 today. If Alibaba Group is expected to pay a dividend of…
A: Given Information : Current Share Price = $25 Expected Dividend Per Share = $0.75 Growth in stock…
Q: Growth Company's current share price is $19.95, and it is expected to pay a $1.00 dividend per share…
A:
Q: Maliban PLC just paid a dividend of Rs.5/= per share and it is expected to grow at a rate of 8% per…
A: Cost of equity means the rate of return expected by investor or we can say the rate of return. Cost…
Q: Tyler Corporation anticipates a P6 dividend per share for the year. Its minimum rate of return is…
A: Calculation of price per share:: Price=Dividend/(ke-g)... Where ke is the cost of capital.. G is…
Q: Panhandle Industries, Inc., currently pays an annual common stock dividend of $8.80 per share. The…
A: Po = D1 / Ke - g Po = Current market price D1 = Expected dividend Ke = Cost of equity G=Growth…
Q: The common stock of Bethel Baked Goods is valued at $8.76 a share. The company increases its…
A: Goods valued = 8.76 Growth rate of dividend = 1.5% Dividend = 0.65 Current Stock Price = Expected…
Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…
A: Dividend: The dividends are the returns provided to the shareholders by the company. The dividends…
Q: Toy plc is expected to record earnings per share of £7.00 next year and is expected to maintain its…
A: We will use Dividend discount model for calculation of value of share. In Dividend discount model,…
Q: If the stock sells for $35 a share, what is the company's cost of equity?
A: The constant dividend growth model or Dividend Discount Model is used to calculate the present value…
Q: What is the dividend payout ratio?
A: The correct answer is 60%
Q: BM expects to pay a dividend of $8 next year and expects these dividends to grow at 3.15% a year.…
A: IBM Share Price = Dividend Next Year / (Cost of Equity - Growth Rate)
Q: Heavy Rain Corporation just paid a dividend of $4.33 per share, and the firm is expected to…
A: This Question is based on dividend discount model. We are required to calculate the S i.e. Using…
Q: Mannix Corporation stock currently sells for $80 per share. The market requiresa return of 11…
A: when there is a constant growth we use the gordon growth model to find the current market price of…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.35 next year. The growth…
A: Stock price can be computed as follows: Price=DividendRequired return-Growth rate
Q: Suppose Potter Ltd. just issued a dividend of $2.54 per share on its common stock. The company paid…
A: The cost of equity capital is the minimum required rate of return expected by investors. The cost of…
Q: Evelyn Incorporated is expected to pay a dividend at year end of D1 = $2.25. This dividend is…
A: Before tax cost of debt =7.50% After tax cost of debt = Before tax cost of debt * (1-tax rate) After…
Q: company has stock which costs $45.00 per share and pays a dividend of $2.50 per share this year. The…
A: We can use the dividend discount model here. As per the dividend discount model: P0 = D1/(r-g) where…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth…
A: According to the general rule of finance, the value of a financial asset represents a sum of present…
Q: Aboudy Corporation's stock price is currently $22.00 per share. The company has just paid a dividend…
A: The formula used is shown:
Q: Salte Corporation is issuing new common stock at a market price of $27.00. Dividends last year were…
A: The below expression can be used to calculate cost of common equity:
Q: Sigma Inc. has just paid a dividend of $2.50 per share, and it is expected to pay a dividend of…
A: The paid dividend (D0) is $2.50. The expected pay dividend (D1) is $2.75. The required return on…
Q: Suppose Hornsby Ltd. just issued a dividend of $2.55 per share on its common stock. The company paid…
A: Calculating the value of cost of equity capital using arithmetic growth rates. We have,(a)…
Q: firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…
A: Company pay the dividend to preferred stock holders and common stock holders from the net income…
Q: The shares of a company are selling at Rs.40 per share and it had paid a dividend of Rs.4/share last…
A: The dividend discount model is the model of stock valuation that assumes that the stock price of a…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.35 next year. The growth…
A: The following formula will be used:
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.80 next year. The growth…
A: The current price of the stock is the sum of the present values of entire inflows from the stock or…
Q: If the stock currently sells for $77 per share, what is the market-to-book ratio? Makers Corp. had…
A: Market to book ratio = Market price / Book value per share
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.50 next year. The growth…
A: The share price is the current market price of the share. It is the price of the share at any…
Q: Sorensen Systems Inc. is expected to pay a $2.00 dividend at year end (D1 = $2.00), the dividend is…
A: wacc formula is given as: WACC =wd×kd×1-tax+we×kewhere,wd= weight of debtwe= weight of equitykd=cost…
Q: Digital Industries paid a dividend of $2.00 per share of stock recently and expects to grow the…
A: Let Dn be the dividend in year n. D0 = $2 Growth rate (g) = 3% r = 7%
Q: A company has stock which costs $42.25 per share and pays a dividend of $2.90 per share this year.…
A: We require to calculate the annual growth rate of dividends from the following details: Stock price…
Q: Isetan Limited sells common stock for $18.00 a share and has a market rate of return of 5.0 percent.…
A: Dividend growth model Value of stock= D(1+g) /(ke - g) Here D= divided paid per share g=…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth…
A: Given Information: Dividend = $3.25 Growth rate in dividends = 5% Required return for Red Inc =…
Q: anther Inc common stock is selling for $58.77 per share. The company pays a constant annual ividend…
A: Solution: Dividend is the amount of profits that is paid by the company to its shareholders. In…
Q: ABC Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to…
A: Computation:
Q: Dalmatian Co. is currently paying a dividend of P2.20 per share. The dividends are expected to grow…
A: Dividend: It is the distribution of profit earned by a company its common stock shareholders. In…
Q: HighGrowth Company has a stock price of $21. The firm will pay a dividend next year of $1.01, and…
A: Given: Stock Price(P0 )=$21Dividend paid next year (D1)=$1.01Expected growth rate of dividend…
Q: An all-equity firm had a dividend expense of $45,000 last year. The market value of the firmis…
A: Market value today, V is associted with the total expected dividend expense D1 via the following…
Q: ABC Inc. is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to…
A: WACC = (Ke * We) + (Kd * Wd) Ke = Cost of equity Kd = Cost of debt We = Weight of equity Wd = Weight…
Q: Ovit, Inc. has preferred stock with a price of $19.61 and a dividend of $1.53 per year. What is its…
A: Given, Annual dividend = $1.53 Current stock price = $19.61 Dividend yield = Annual dividend /…
Q: The Castle Company recently reported net profits after taxes of $14.7 million. It has 2.5 million…
A: Net profit after tax=$14.7millionCommon stock outstanding=2.5millionPreferred…
Q: Countess Corp. is expected to pay an annual dividend of $3.97 on its common stock in one year. The…
A: Calculating the cost of equity using the formula of dividend discounting model. We have,Current…
Q: Corcoran Inc. uses the Gordon Growth Model to estimate ks; its current stock price is $30; it…
A: a) Assumption: The after-tax cost of debt is assumed as 10%.
Q: Builtrite's common stock is currently selling for $65 a share and the firm just paid an annual…
A: The cost of equity refers to the return that a company must earn to its investors and shareholders.…
Q: The common stock of ABC Corp is selling for $65 per share. The company pays a constant annual…
A: Following details are given to us in the question for ABC Corp: Stock Price = $65 Required Return =…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $4.15 next year. The growth…
A: The dividend discount model states that the dividends that are paid by a company are good indicators…
Q: Panhandle Industries, Inc., currently pays an annual common stock dividend of $2.20 per share. The…
A: given, D0= $2.20g=8%dividend payout = 40%multiple = 8
Tets limited is a multi- national company. The company's current year dividend is Shs.1.56 per share and is expected to grow by 3% annually.What is the approximate
Step by step
Solved in 2 steps
- The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the balance sheet date, MJOs stock was selling for S25 per share. Required: Assuming MJOs dividend yield is 1%, what are the dividends per common share? Assuming MJOs dividend yield is 1% and its dividend payout is 20%, what is MJOs net income?This question is based on the following information: Pitts Company’s common stock is selling at P 82/share. Last year, the Dividends per share was P 4. The dividend is expected to grow at 25% yearly, Flotation cost is P 2/share. What is the cost of retained earnings?a. 31.10%b. 31.25%c. 32.25%d. 33.25% P 2/share. What is the cost of the new common stock?a. 31.25%b. 32.25%c. 33.25%d. 34.25%
- Assume that a company’s shares has intrinsic value P125 per share and is trading at P130. This company requires an 6% minimum rate of return and will pay a dividend per share next year which is expected to increase by 4% annually. a. How much the company will pay for dividend per share? b. What is the status of the shares in the market?A business’s ordinary shares are currently trading at £4.00 (ex dividend) each in the capital market. Next year’s dividend is expected to be £0.22 per share, and subsequent dividends are expected to grow at an annual rate of 8 per cent of the previous year’s dividend. What is the cost of equity?Assume that a company’s shares have an intrinsic value of P125 per share and are trading at P130. This company requires a 6% minimum rate of return and will pay a dividend per share next year which is expected to increase by 4% annually. How much the company will pay for dividends per share? What is the status of the shares in the market?
- Growth Company's current share price is $19.95 and it is expected to pay a $1.00 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 3.8% per year. a. What is an estimate of Growth Company's cost of equity? b. Growth Company also has preferred stock outstanding that pays a $2.30 per share fixed dividend. If this stock is currently priced at $28.15, what is Growth Company's cost of preferred stock? C. Growth Company has existing debt issued three years ago with a coupon rate of 5.8%. The firm just issued new debt at par with a coupon rate of 6.6%, what is Growth Company's cost of det? d. Growth Company has 5.4 million common shares outstanding and 1.2 million preferred shares outstanding, and its equity has a total book value of $50.1 million. Its liabilities have a market value of $20.3 million. If Growth Company's common and preferred shares are priced as in parts (a) and (b), what is the market value of Growth Company's assets? e, Growth…BBB plc plans to pay a dividend next year of 41.2p per share and has a cost of equity of 9% per year. BBB plc has a dividend payout ratio of 50% and its EPS (earnings per share) is 80p. What is the ex-div share price of the company?Jarett & Sons's common stock currently trades at $29.00 a share. It is expected to pay an annual dividend of $1.50 a share at the end of the year (D1 = $1.50), and the constant growth rate is 6% a year. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. If the company issued new stock, it would incur a 15% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places.
- c. Growth Company has existing debt issued three years ago with a coupon rate of 5.5%. The firm just issued new debt at par with a coupon rate of 6.2%. What is Growth Company's cost of debt? (Select from the drop-down menus.) The pre-tax cost of debt is the firm's YTM on current debt. Since the firm recently issued debt at par, then the coupon rate of that debt must be the YTM of the debt. Thus, the pre-tax cost of debt is d. Growth Company has 4.7 million common shares outstanding and 1.1 million preferred shares outstanding, and its equity has a total book value of $50.0 million. Its liabilities have a market value of $20.1 million. If Growth Company's common and preferred shares are priced as in parts (a) and (b), what is the market value of Growth Company's assets? The market value of assets is $ million. (Round to two decimal places.) e. Growth Company faces a 22% tax rate. Given the information in parts (a) through (d), and your answers to those problems, what is Growth Company's…Jarett & Sons' common stock currently trades at $34.00 a share. It is expected to pay an annual dividend of $1.50 a share at the end of the year (D₁ = $1.50), and the constant growth rate is 7% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur a 12% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. %Jarett & Sons's common stock currently trades at $38.00 a share. It is expected to pay an annual dividend of $2.75 a share at the end of the year (D1 = $2.75), and the constant growth rate is 7% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur a 14% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. %