The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 2 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Your preliminary analysis of two stocks has yielded the information set forth below. The market capitalization rate for both Stock A and Stock B is 10% per year.
| Â |
Stock A |
Stock B |
|
Expected return on equity, ROE |
14% |
12% |
|
Estimated earnings per share, E1 |
$ 2.00 |
$ 1.65 |
|
Estimated dividends per share, D1 |
$ 1.00 |
$ 1.00 |
|
Current market price per share, P0 |
$27.00 |
$25.00 |
a. What are the expected dividend payout ratios for the two stocks?
b. What are the expected dividend growth rates of each?
c. What is the intrinsic value of each stock?
d. In which, if either, of the two stocks would you choose to invest?
Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll