Business, 26.02.2020 00:14 coleman4405
The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 2.10, and plans to maintain indefinitely its traditional plowback ratio of 1/3. This yearâs earnings were $3.60 per share. The annual dividend was just paid. The consensus estimate of the coming yearâs market return is 13%, and T-bills currently offer a 5% return.
a. Find the price at which Analog stock should sell. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. Calculate the P/E ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
c. Calculate the present value of growth opportunities. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
d. Suppose your research convinces you Analog will announce momentarily that it will immediately change its plowback ratio to 2/3. Find the intrinsic value of the stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answers: 2
Business, 22.06.2019 15:30
The school cafeteria can make pizza for approximately $0.30 a slice. the cost of kitchen use and cafeteria staff runs about $200 per day. the pizza den nearby will deliver whole pizzas for $9.00 each. the cafeteria staff cuts the pizza into eight slices and serves them in the usual cafeteria line. with no cooking duties, the staff can be reduced by half, for a fixed cost of $75 per day. should the school cafeteria make or buy its pizzas?
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Business, 22.06.2019 17:00
You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. the portfolio's beta is 1.12. you plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.50. what will the portfolio's new beta be? do not round your intermediate calculations.
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Business, 22.06.2019 21:10
You are the manager of a large crude-oil refinery. as part of the refining process, a certain heat exchanger (operated at high temperatures and with abrasive material flowing through it) must be replaced every year. the replacement and downtime cost in the first year is $165 comma 000. this cost is expected to increase due to inflation at a rate of 7% per year for six years (i.e. until the eoy 7), at which time this particular heat exchanger will no longer be needed. if the company's cost of capital is 15% per year, how much could you afford to spend for a higher quality heat exchanger so that these annual replacement and downtime costs could be eliminated?
Answers: 1
The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 2.10, and pla...
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