Sunshine corporation is expected to pay a dividend of

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60. Sunshine Corporation is expected to pay a dividend of $1.50 in the upcoming year.Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 6%and the expected return on the market portfolio is 14%. The stock of Sunshine Corporationhas a beta of 0.75. The intrinsic value of the stock is ______.A. $10.71B. $15.00C. $17.75D. $25.00E. None of these is correct
61. Low Tech Chip Company is expected to have EPS of $2.50 in the coming year. Theexpected ROE is 14%. An appropriate required return on the stock is 11%. If the firm has adividend payout ratio of 40%, the intrinsic value of the stock should be
Risk Metrics Company is expected to pay a dividend of $3.50 in the coming year. Dividendsare expected to grow at a rate of 10% per year. The risk-free rate of return is 5% and theexpected return on the market portfolio is 13%. The stock is trading in the market today at aprice of $90.00.62. What is the market capitalization rate for Risk Metrics?
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Chapter 18 - Equity Valuation Models63. What is the approximate beta of Risk Metrics's stock?
64. The market capitalization rate on the stock of Flexsteel Company is 12%. The expectedROE is 13% and the expected EPS are $3.60. If the firm's plowback ratio is 50%, the P/Eratio will be ________.A. 7.69B. 8.33C. 9.09D. 11.11E. None of these is correct
65. The market capitalization rate on the stock of Flexsteel Company is 12%. The expectedROE is 13% and the expected EPS are $3.60. If the firm's plowback ratio is 75%, the P/Eratio will be _______.
66. The market capitalization rate on the stock of Fast Growing Company is 20%. Theexpected ROE is 22% and the expected EPS are $6.10. If the firm's plowback ratio is 90%,the P/E ratio will be _______.
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Chapter 18 - Equity Valuation Models67. J.C. Penney Company is expected to pay a dividend in year 1 of $1.65, a dividend in year2 of $1.97, and a dividend in year 3 of $2.54. After year 3, dividends are expected to grow atthe rate of 8% per year. An appropriate required return for the stock is 11%. The stock shouldbe worth _______ today.
68. Exercise Bicycle Company is expected to pay a dividend in year 1 of $1.20, a dividend inyear 2 of $1.50, and a dividend in year 3 of $2.00. After year 3, dividends are expected togrow at the rate of 10% per year. An appropriate required return for the stock is 14%. Thestock should be worth _______ today.A. $33.00B. $39.86C. $55.00D. $66.00E. $40.68

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Term
Fall
Professor
Chaocharhhia
Tags
Time Value Of Money, International Finance, Valuation, Dividend yield, P E ratio, Equity Valuation Models

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