• Homework Help
• 1

This preview shows page 1 out of 1 page.

There are two versions of the quiz. One question is showing with both versions being worked out after the question. 1. Builtrite's common stock is currently selling for \$80 a share and the company has a PE ratio of 16. What are Builtrite's earnings per share? Stock price/PE = EPS 80/16 = \$5 or 72/12 = \$6 2. Builtrite just paid a dividend of \$2 a share and expects dividends to continue growing at 10% annually. Investors require a 16% rate of return on Builtrite stock. What would you expect Builtrite stock to sell for? D1/(g k)=2(1.10) 2.20/(.16-.10)=\$36.67 or 5(1.08) = 5.40/(.15- .08)=\$77.14 3. Builtrite preferred stock just paid a dividend of \$3 for their preferred stock selling for \$45 a share. What is the approximate required return for
You've reached the end of this preview.
• Fall '08
• Olander
• Builtrite's common stock

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern