(Click on the icon here in order to copy the contents of the data table be into a spreadsheet.) Year 2019 2018 2017 2016 Dividend per Share $1.88 $1.76 $1.64 $1.53
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- Giant Enterprises' stock has a required return of 13.1%. The company, which plans to pay a dividend of $1.65 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: ( see attached chart ) a. If the risk-free rate is 4%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock.Yharnam Co. is expected to pay a dividend of D1 = $1.40 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5.00% per year in the future. The company's beta is 1.2, the Market Risk Premium is 6.25%, and the risk-free rate is 3.90%. What is the company's current stock price? Group of answer choices 24.06 18.59 28.00 22.40 21.88Assume the risk-free rate on long-term Treasury bonds is 6.04%. Assume also that the average annual return on the Winslow 5000 is 11% as the expected return on the market. Use the SML equation (i.e., CAPM) to calculate the two companies' required returns. Bartman Industries Reynolds Inc. Year Stock Price Dividend Holding period return Stock Price Dividend Holding period return 2020 $17.25 $1.15 $48.75 $3.00 2019 14.75 1.06 52.30 2.90 2018 16.50 1.00 48.75 2.75 2017 10.75 0.95 57.25 2.50 2016 11.37 0.90 60.00 2.25 2015 7.62 55.75
- Assume you’ve forecasted the following Net Income amounts for Chipotle over the period 2021-2030. Assuming a beta of 1.28, a risk-free rate of 1.14% and a market risk premium of 4.72%. Assume Chipotle pays “dividends” each period equal to 5.24% of net income. The beginning book value of equity equals $2,020,135. Calculate residual income and the present value of each residual income amount. (Don’t forget to calculate book value of shareholders’ equity each period.) See attatched picture for work 2. Calculate the continuing value assuming a 3% growth rate.Step 1: Multiply Net Income for 2030 by (1+g)Step 2: Multiply Book Value of Shareholder’s Equity at end of 2030 by RE (cost of equity).Step 3: Subtract Step 2 amount from Step 1 amount. This is the continuing residual income.Step 4: Assume the Step 3 amount is a perpetuity with growth (this amount will grow forever at a constant rate). Divide the Step 3 amount by (RE-g). It will be a big number. 3. Add…PLEASE SOLVE THIS QUESTION, ASAP: Q: Suppose a company estimates following one year returns from investing in the common stock of Leopard Corporation: Possibility of Occurrence .1 .25 .1 .15 .1 .2 .1 Possible returns 15% 30% 15% -10% -5% 20% 10% Required: Calculate Expected return & Risk {Standard Deviation)Given the following information for the stock of Foster Company, calculate the risk premium on its common stock. Current price per share of common stock $58.14 Expected dividend per share next year $1.95 Constant annual dividend growth rate 7.5% Risk-free rate of return 7.2% a. The risk premium on Foster stock is ___ % Just need that a answered
- Giant Enterprises' stock has a required return of 14.7%. The company, which plans to pay dividend of $1.57 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2016-2022 period, when the following dividends were paid: a. If the risk free rate is 4%, waht is the risk premium on Giant's Stock? b. Using the constant growth model, estimate the value of GIant's Stock .(Hint. Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock.Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model. Barton expects next year's annual dividend, D1, to be $2.20 and it expects dividends to grow at a constant rate gL = 4.2%. The firm's current common stock price, P0, is $21.00. The current risk-free rate, rRF, = 4.7%; the market risk premium, RPM, = 6%, and the firm's stock has a current beta, b, = 1.1. Assume that the firm's cost of debt, rd, is 8.99%. The firm uses a 4% risk premium when arriving at a ballpark estimate of its cost of equity using the bond-yield-plus-risk-premium approach. What is the firm's cost of equity using each of these three approaches? Do not round intermediate calculations. Round your answers to 2 decimal places. CAPM cost of equity: % Bond-Yield-Plus-Risk-Premium: % DCF cost of equity: %Weber Integrated Systems Inc. is expected to pay a year-end dividend of $0.90 per share (i.e. D1 = $0.90), and that dividend is expected to grow at a constant rate of 4.00% per year in the future. The company's beta is 1.20, the market risk premium is 5.00 %, and the risk - free rate is 4.00 % . What is the company's current stock price? a. $15.00 b. $15.60 c. $16.33 d. $17.77 e. $ 18.20