Assume Antelope Equipment is planning ongrowing its sales by 25% next year. Use the firstpass section to determin any additional fundsneeded second pass section to add the newfinancing (use the current weight for long-termdebt, preferred stock and common stock whenallocating the A balance the balance sheet. Note:the preferred dividend will not change but thecommon stock dividend will grow by 6%. Also, Ihave given your the Balance Sheet and IncomeStatement as a percentage of sales exceptdepreciation, which is a percentage of PP&E.This does not mean you use forecasting everyitem on the pro forma statements (i.e. you haveto know which items use % of sales and whichitems are

Pro Forma Financial StatementsPro forma financial statements are crucial for businesses planning…

Answered: Assume Antelope Equipment is planning…

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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Assume that a share of stock has just paid an annual dividend of $3.00 (Do), and that this dividend is expected to grow by $0.07 in each future year (i.e.. $3.07 in Year 1, $3.14 in Year 2, $3.21 in Year 3, etc.). Also assume that investors require a 13.0 percent rate of return. Given this information, and using the Banko growth model, determine what the current price of this stock should be. Answer in XX.XX format, with no dollar sign. For example, if your answer is $18.29, enter "18.29".
EXCEL PROJECT AND EXCEL SOLUTION Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim: Stock A Stock B Stock с Stock D Market Capitalization (5 million) 800 750 950 900 Expected Liquidating Dividend ($ million) 1000 1000 1000 1000 Beta PLEASE SHOW SOLUTIONS IN EXCEL 0.77 1.46 1.25 1.07 a. Calculate the expected return of each stock. b. What is the sign of correlation between the expected return and market capitalization of the stocks? In Problem 20, assume the risk-free rate is 3% and the market risk premium is 7%. a. What does the CAPM predict the expected return for each stock should be? b. Clearly, the CAPM predictions are not equal to the actual expected returns, so the CAPM does not hold. You decide to investigate this further. To see what kind of mistakes the CAPM is making, you decide to regress the actual expected return onto the expected return predicted by the CAPM.49 What is the intercept and slope coefficient of…
The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividends (D₁) at the end of the current year will be $1.40. The growth rate (g) is 10 percent and the discount rate () is 14 percent. a. What should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Price of the stock b. If there is a 5 percent total underwriting spread on the stock, how much will the issuing corporation receive? (Do not round intermediate calculations and round your answer to 2 decimal places.) Net price to the corporation c. If the issuing corporation requires a net price of $33.50 (proceeds to the corporation) and there is a 5 percent underwriting spread, what should be the price of the stock to the public? (Do not round intermediate calculations and round your answer to 2 decimal places.) Necessary public price
You expect Fab Corp to pay a dividend of $2.14/share next year (Year 1); $2.24/share in Year 2; $2.35/share in Year 3; and $2.55/share in Year 4. You also believe the stock will trade in the market at $130/share at the end of Year 4. Draw a timeline for Fab Corp given your expectations assuming all cash flows occur at the end of each year. You have estimated Fab Corp’s Cost of Equity to be 9.1%. Using your timeline, estimate what Fab’s stock should be trading at now.
You want to check if GRBH stock is fairly priced in the markets by using the fundamental analysis. For this purpose, you have gathered the following information: GRBH pays dividends once a year and the next dividend payment is expected to be made in one year. You project the EPS of the first and second year to be $5 and $7 respectively. The company dividend payout ratio is stable at 0.2. At the end of the second year, you assume that the company would become the average company in the industry. The industry average PE ratio is 8. You believe that the appropriate required rate of return on GRBH stock is 10% (CCR per annum). And the current market price of GRBH stock is $45. ind the present value of GRBH stock based on the information above. Is the stock over- or under-priced?
You want to check if GRBH stock is fairly priced in the markets by using the fundamental analysis. For this purpose, you have gathered the following information: GRBH pays dividends once a year and the next dividend payment is expected to be made in one year. You project the EPS of the first and second year to be $5 and $7 respectively. The company dividend payout ratio is stable at 0.2. At the end of the second year, you assume that the company would become the average company in the industry. The industry average PE ratio is 8. You believe that the appropriate required rate of return on GRBH stock is 10% (CCR per annum). And the current market price of GRBH stock is $45. Find the present value of GRBH stock based on the information above. Is the stock over- or under-priced? Find the alpha ( Expected abnormal rate of return, c ) assuming the mispriced figure would be corrected in a year.
You want to check if GRBH stock is fairly priced in the markets by using the fundamental analysis. For this purpose, you have gathered the following information: GRBH pays dividends once a year and the next dividend payment is expected to be made in one year. You project the EPS of the first and second year to be $5 and $7 respectively. The company dividend payout ratio is stable at 0.2. At the end of the second year, you assume that the company would become the average company in the industry. The industry average PE ratio is 8. You believe that the appropriate required rate of return on GRBH stock is 10% (CCR per annum). And the current market price of GRBH stock is $45 Find the alpha ( Expected abnormal rate of return, c ) assuming the mispriced figure would be corrected in a year.
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $56. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? A Required What is the total rate of return for the stock? B Required What is the dividend yield and percentage capital gain? C Required Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)
Abc. Is expected to pay a dividend in year 1 of $2.00, a dividend in year 2 of $3.00, and a dividend in year 3 of $4.00. After year 3, dividend are expected to grow at the rate of 7% per year. Using multistage ddm (i.e. Shifting growth rate model), the stock has its intrinsic valueof $____ today if the required return of the stock is 12%.
1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96. Please provide an accurte answer.
NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40. After year 2, dividends are expected to grow at the rate of 6% per year. An appropriate required return for the stock is 9%. The stock should be worth _______ today. Select one: a. $79.63 b. $73.21 c. $67.32 d. $73.37
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