Valuation Finance

Get help with your Valuation (finance) homework. Access the answers to hundreds of Valuation (finance) questions that are explained in a way that's easy for you to understand. Can't find the question you're looking for? Go ahead and submit it to our experts to be answered.

Study tools on Study.com
27,000 + Video Lessons
920,000+ Questions and Answers
65,000+ Quizzes
Copyright

Valuation Finance Questions and Answers

Test your understanding with practice problems and step-by-step solutions. Browse through all study tools.

Beauty Ltd has identified recoverable amount on one of its CGUs to be $660,000. Land has a fair value (less costs to sell) of $206,000. All assets are measured using the cost model. The CGU consis...
Exabyte Products just paid a dividend of $0.99 per share, and the stock currently sells for $24.50. If the discount rate is 8.5%, what is the dividend growth rate?
Exabyte Products just paid a dividend of $1.80 per share, and the stock currently sells for $60. If the discount rate is 11%, what is the dividend growth rate?
Exabyte Products just paid a dividend of $2.17 per share, and the stock currently sells for $40. If the discount rate is 13%, what is the dividend growth rate?
FF Industries will pay a regular dividend of $2.50 per share for each of the next five years. At the end of the five years, the company will also pay out a $50 per share liquidating dividend, and t...
To measure a firm's solvency as completely as possible, we need to consider: a. The firm's relative proportion of debt and equity in its capital structure. b. The firm's capital structure and the l...
The Fish House increases its dividend each year. The next annual dividend is expected to be $0.85 a share. Future dividends will increase by 6% annually. What is the current value of this stock if...
The Fish House increases its dividend each year. The next annual dividend is expected to be $2.80 a share. Future dividends will increase by 3.5% annually. What is the current value of this stock i...
The Fish House increases its dividend each year. The next annual dividend is expected to be $2.32 a share. Future dividends will increase by 4.0% annually. What is the current value of this stock i...
PT Boats plans to pay a $3.00 a share dividend at the end of each of the next 2 years. At the end of year 3, it will pay a final liquidating dividend of $20 a share. After that, the company plans t...
PT Boats plans to pay a $2.25 a share dividend at the end of each of the next 2 years. At the end of year 3, it will pay a final liquidating dividend of $15 a share. After that, the company plans t...
Flagstaff Enterprises is expected to have free cash flow in the coming year of $10 million, and this free cash flow is expected to grow at a rate of 3% per year thereafter. Flagstaff has an equity...
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had a net operating income of $480,000 on sales o...
Research the Internet or the Strayer Online Library for information related to the SEC Acts of 1933 and 1934. Next, create a scenario where your client intentionally violates the Securities Act of...
The stock valuation model that determines the current stock price by dividing the next annual dividend amount by the excess of the discount rate less the dividend growth rate is called the _____ mo...
The Northern Steak Co. pays an annual dividend of $2 per share on its common stock. This dividend amount has been constant for the past ten years and is expected to remain constant. Given this, one...
The dividend growth model considers capital gains but ignores the dividend yield. True False
The dividend growth model states that the market price of a stock is only affected by the amount of the dividend. True False
The dividend growth model can be used to compute a stock price at any point in time. True False
The dividend growth model assumes that dividends increase at a constant rate forever. True False
Assume you are using the dividend growth model to value stocks. If you expect the market rate of return to increase across the board on all equity securities, then you should also expect the: a. ma...
Stanley Publishers currently pays no dividend. The company is anticipating dividends of $0.68, $0.70, $0.85, $0.90, and $1 over the next five years, respectively. After that, the company anticipate...
Super-normal growth refers to a firm that increases its dividend by: a. three or more percent per year. b. a rate which is most likely not sustainable over an extended period of time. c. a constant...
Which one of the following sets of dividend payments best meets the definition of two-stage growth as it applies to the two-stage growth dividend model? a. No dividends for three years, then incre...
Papa Pizza just paid $0.65 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 0.75%. If you require a 11.8% rate of return...
Gerald's Travel Service just paid $1.15 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 2.3%. If you require a 13% rate...
According to the fundamental principle of intrinsic value, how does a firm value an asset?
Gerald's Travel Service just paid $1.79 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 3.2%. If you require a 10.5% ra...
Lotte Group is planning on diversifying into the transportation industry. As a result, Lotte's beta would rise to 1.3 from 1.1 the expected long-term growth rate in the firm's earnings would increa...
Richtex Brick has a current dividend of $1.70 and the market value of its common stock is $28. The expected market return is 13 percent and the risk-free rate is 9 percent. If Richtex stock is half...
Juniper's Trees made two announcements concerning their common stock today. First, the company announced the next annual dividend will be $4.90 a share. Secondly, all dividends after that will incr...
Ken's Dolls made two announcements concerning their common stock today. First, the company announced the next annual dividend will be $0.85 a share. Secondly, all dividends after that will increase...
Richard's Pharmacy made two announcements concerning their common stock today. First, the company announced the next annual dividend will be $1.48 a share. Secondly, all dividends after that will i...
How much are you willing to pay for one share of Hockey stock if the company just paid a $6.00 annual dividend, the dividends increase by 1.5% annually, and you require a 18% rate of return?
How much are you willing to pay for one share of Muppet stock if the company just paid a $2.88 annual dividend, the dividends increase by 0.8% annually, and you require a 11% rate of return?
How much are you willing to pay for one share of Delphi stock if the company just paid a $1.34 annual dividend, the dividends increase by 2.8% annually, and you require a 14% rate of return?
Textile Exporters paid a $2.05 per share annual dividend last week. Dividends are expected to increase by 1.5% annually. What is one share of this stock worth to you today if your required rate of...
Textile Importers paid a $1.60 per share annual dividend last week. Dividends are expected to increase by 4% annually. What is one share of this stock worth to you today if your required rate of re...
Elegant Homes stock traditionally provides a 12% rate of return. The company just paid an annual dividend of $2.25 a share and is expected to increase that amount by 4% per year. If you are planni...
Elegant Homes stock traditionally provides a 16% rate of return. The company just paid an annual dividend of $3.20 a share and is expected to increase that amount by 5% per year. If you are planni...
You are valuing First Bank, a large commercial bank. The bank reported earnings per share of $4.00 last year and paid out dividends of sz.40 per share. The earnings are expected to grow 4%a year in...
The common stock of CJ's Auto Clinic sells for $49.33 a share. The stock is expected to pay $5.00 per share next month when the annual dividend is distributed. CJ's has established a pattern of inc...
The common stock of BJ's Auto Clinic sells for $25.60 a share. The stock is expected to pay $2.80 per share next month when the annual dividend is distributed. BJ's has established a pattern of inc...
The common stock of AJ's Auto Clinic sells for $38.25 a share. The stock is expected to pay $1.90 per share next month when the annual dividend is distributed. BJ's has established a pattern of inc...
Lake Shore Vineyards recently paid a $3.95 annual dividend on their common stock. This dividend increases at an average rate of 2.4% per year. The stock is currently selling for $60.15 a share. Wha...
Texas Foodstuffs just announced the annual dividend for this coming year will be $0.20 a share and all future dividends are expected to increase by 4.5% annually. What is the market rate of return...
Alaskan Foodstuffs just announced the annual dividend for this coming year will be $0.36 a share and all future dividends are expected to increase by 4.5% annually. What is the market rate of retur...
The common stock of Gessup's returned a nifty 31.2% rate of return last year. The dividend amount was $0.60 a share which equated to a dividend yield of 0.6%. What was the rate of price appreciatio...
The common stock of Jessup's returned a nifty 24.6% rate of return last year. The dividend amount was $0.40 a share which equated to a dividend yield of 0.6%. What was the rate of price appreciatio...
ERA, Inc. common stock sells for $50.70 a share and pays an annual dividend that increases by 2.5% annually. The market rate of return on this stock is 11.5%. What is the amount of the last dividen...
EAR, Inc. common stock sells for $22 a share and pays an annual dividend that increases by 3.8% annually. The market rate of return on this stock is 8.2%. What is the amount of the last dividend pa...
The common stock of Lily's Flowers pays an annual dividend that is expected to increase by 0.8% per year. The stock commands a market rate of return of 12% and sells for $100 a share. What is the e...
The common stock of Rose's Flowers pays an annual dividend that is expected to increase by 3.6% per year. The stock commands a market rate of return of 11.6% and sells for $37.80 a share. What is t...
The Home Market has adopted a policy of increasing the annual dividend on their common stock at a constant rate of 1.80% annually. The firm is paying an annual dividend of $1.80 today. What will th...
The Home Market has adopted a policy of increasing the annual dividend on their common stock at a constant rate of 3.75% annually. The firm is paying an annual dividend of $1.10 today. What will th...
a. A stock pays a constant annual dividend and sells for $95.10 a share. If the market rate of return on this stock is 11.5%, what is the dividend amount? b. A stock pays a constant annual dividend...
You have decided you would like to own some shares of the Clean Coal Company but need a 16% rate of return to compensate for the perceived risk of such ownership. What is the maximum you are willin...
The Rose Garden common stock sells for $51.28 a share and has a market rate of return of 12.2%. The company just paid an annual dividend of $2.25 per share. What is the dividend growth rate?
The Rose Garden common stock sells for $39.80 a share and has a market rate of return of 10.5%. The company just paid an annual dividend of $1.88 per share. What is the dividend growth rate?
BB Adventures will pay an annual dividend of $0.80 a share on their common stock next week. Last year, the company paid a dividend of $0.50 a share. The company adheres to a constant rate of growth...
Support