Please see problems attached. Please put answers in EXCEL separate tabs. Thank you in advance. Problems Complete the following problems from Chapters 7, 14, and 15
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{7-7') DpS Calculation
(7-2!
Constant Gror.vtl:Valuarion
f/-3) Constant GrowthValuation
{7-4) preferred Stock Valuation
(7_s)
Nonconstant GrowthVa}:ation
(7-6)
Value of Operations of Constant Growth
Firrn
(7-7)
Horizon Value
IntermediateProblems &-17
(7-8)
Constant GrofihRate, g
{7-e) Constant GrowthValuation
Thress Industries i*st paid a dividend of $r.50 a share (i.e.. D" = sr.50). The dividend is expected to grow 5o/o _a fer tor the next 3 years and then l09i a year thereafter. What is the expected tlivjdenci per share f". .".1, "i *e next 5 1-ears? Boehm lnc.rporatedtr,:"p.rrrr-d to par a $1.,i0 psr share aividend at the end of this year (i'e', D, - sr.50)' The dividend,r "ifJ.li'* gr.*, at a consrailt rate of 69zc a 1.ear. The
;.l.fft:ljilf return on the stock,.", iulj"z". what is tr,..rti*utla,aiue per share of
woidtke Manufhcturing's stock currentlv se's rbr $22 a share. The stock just paid a dividend of $1 20 a shaie (i.e,pq = ii.roj, .rra the
o;;,i;', stock (assum. irr" *u.r.o is in equilibrium u'ith the required return equal to the expected return)i Nick's Enchiradas Tncorporatetr has preferred stock outstanding that pays a dividenci of g-5 at the end of each year"-The p..f".,=,i,.il;;;. $50 a share. #hat is.th" srock,s required
:[::;f:ff 1]:"*'the market i' t" "quiiilrr,um r,r,irh ,r-,"."qui..a'.erurn equal to the
A cornpanv currently pa1.s a di,"rdend of $2 per.share (Do = $2). It is estimated that the
::IifrT$:#:;:1] q:'*':l' 'ut' orzdz" per,)ear ror rhe.,*,t z f"u.,, anci then at a
7 5 o/o, and,r,. *..k.;;lT ilL ffi i:l:,;Tffi ::T,::X,HI:i';;l *X1 .m ftj:, F'N'IC corporation has 'ever paid a di'idencr. Its current iree cash fl.w of $400,000 is expected fo grolv at a constant rate o1: 50/o. The iveigirted al€rage cost of capital is
/ACC = l2olo. Cajcuiate EMC,s estimatej ""i"" "i operations.
current and projecteri fr"ee cash trors for Radeil Globar operations are shorvn berort. Gro*th is expe*ec1 ro be consrant alier 20r5, ,i{ lT weighte
erage cost of capital is ll"u whar is rhc horizrn (c.ntinuing)".1;.;;)o,u,rg.u,,LI, ,rr*loii remairrs consranr?
Actual
2013
Free cash flow $606.82 {rnillions of dolfarsi
rX X.'..5:1:TiiT ilf i:ffi,'"ni'j:15 :]"_:l l. expeded ro have a vear-end clividend or $i,: ::.:T;".!?,=l-);#' *I:, :f ::*j;;ed ;' il::i:il:J: ;;E Jx*$:S:i,*l
:i}:Tfi:lr:1,'il',;:::':::":,ilru1 jil[::x:lT',:':::'iffiI:i"JilT: required rerur n equat to the expect.d .;;;;.";;;,'; ;::.T.::::, "JrT Cri
;:$.??5T:'-:;TI";:xll:l';'"":li:::1..0u, a dividend r:rg3 a share at trre end or
;?:x'J1?;;T;'"' j,.:::":;I-;;,i;:;d::T,:';'i:#,T"1i;:T:".i:J'[;
projected
2014 2015 2016
$667.50 $707.55 $7s0.00
:JH*il ::,1'1":H.' :':"::' : ::.* :.j j:, ;;;; ; ffi ;' J[,]1 :n T,':X] Ji'.u,,".u
rff :J ilfit *f i: l'.'i*,i' :':T1"1 !,T ;; F i ;,"' ;ffiff H::"ilXlji il: marker believe rvill be rhe stock,s p.ic. Jt r;;ilTIfi::[::.ffi;;:T.',i
Easy Problems 1-7