FIN 300 Stock Quiz 4 answersSPR2019.pdf

FIN 300 Stock Quiz 4 answersSPR2019.pdf - There are two...

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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
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  • Fall '08
  • Olander
  • Builtrite's common stock

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