Ch_08_HW_A_Solutions

# Ch_08_HW_A_Solutions - D 1 = D(1 g 3.85 = D 0 1.070 D 0 =...

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Ch 08 HW A Solutions 1 Ch 08 HW A Solutions 1. P 0 = D 1 /( R g ) D 1 = D 0 (1 + g) D 1 = 2.10 ( 1.035 ) = 2.17 P 0 = D 1 /(R g) P 0 = 2.17 / ( 0.120 - 0.035 ) = 25.57 2. P 3 = D 4 / (R g) D 4 = D 0 (1 + g) 4 D 4 = 2.10 ( 1.035 ) 4 = 2.409798301 P 3 = D 4 / (R g) P 3 = 2.409798301 / ( 0.120 - 0.035 ) = 28.35 3. P 15 = D 16 / (R g) D 16 = D 0 (1 + g) 16 D 16 = 2.10 ( 1.035 ) 16 = 3.641370684 P 15 = D 15 (1 + g) / (R g) P 15 = 3.641370684 / ( 0.120 - 0.035 ) = 42.84 4. P 0 = D 1 /( R g ) 14.75 = 1.55 / (R 0.035 ) 14.75 R 0.516250000 = 1.55 14.75 R = 2.066250000 R = 14.01% 5. R g = D 1 / P 0

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Ch 08 HW A Solutions 2 R = D 1 / P 0 + g D 1 / P 0 = 1.55 / 14.75 = 10.51% 6. g = 3.50% 7. P 0 = D 1 /( R g ) P 0 = 2.10 / ( 0.120 0.050 ) = 30.00 8. P 0 = D 1 /( R g ) R = D 1 / P 0 + g 0.140 = 0.070 + 0.070 D 1 / P 0 = 0.070 D 1 / 55.00 = 0.070 D 1 = 3.85
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Unformatted text preview: D 1 = D (1 + g) 3.85 = D 0 ( 1.070 ) D 0 = 3.60 9. N = 12 PMT = 1.25 I/Y = 15.00% FV = 0 PV = ? PV = 6.78 10. P = D / R R = 7.50 / 98.00 = 7.65% 11. R = D 1 / P + g R = 6.50% + 5.00% Ch 08 HW A Solutions 3 R = 11.50% 12. P = D 1 /( R g ) 56.00 = D 1 / ( 0.090 0.030 ) D 1 = 3.360000000 D 1 = D (1 + g) 3.360000000 = D (1 + 0.030 ) D = 3.26 13. Yld% = D 0 / P D 0 / P = 0.025 0.7 / P 0 = 0.025 P 0 = 28.000000000 P-1 = 28.000000000 + 6.52 = 34.52 14. P/E = 45 28.000000000 /E = 45 E = 0.622222222 EPS = NI / # of shares 0.622222222 = NI / 1,400,000 NI = 871,111.11...
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## This note was uploaded on 11/29/2011 for the course FINANCE 332 taught by Professor Linney during the Fall '11 term at Guilford Tech.

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Ch_08_HW_A_Solutions - D 1 = D(1 g 3.85 = D 0 1.070 D 0 =...

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