Blog

What special test would you expect to be positive for a patient who suffered a ruptured Achilles tendon?

A company had $22 of sales per share for the year that just ended. You expect the company to grow their sales at 6.25 percent for the next five years. After that, you expect the company to grow 4 percent in perpetuity. The company has a 14 percent ROE and you expect that to continue forever. The company’s net margins are 5 percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent. Do not include the $ sign. Example: 12.21  You can use the spreadsheet to solve the question:Exam 2 Spreadsheet.xlsx

Exhibit 8.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate of 8 percent per year for the next five years. After that dividends are expected to grow at a normal rate of 5 percent per year. Assume that the appropriate discount rate is 7 percent.   Refer to Exhibit 8.3. The future price of the stock in year 5 is  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

What is the value of a preferred stock that has a par value of $100, a required rate of return of 11 percent, and pays a 7 percent annual dividend?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Exhibit 7.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.   ​ ​ Current Expected Expected Stock Beta Price Price Dividend X 1.25 $20 $23 $1.25 Y 1.50 $27 $29 $0.25 Z 0.90 $35 $38 $1.00     Refer to Exhibit 7.2. What are the expected (required) rates of return for the three stocks (in the order X, Y, Z)?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

In 2018, Montpelier Inc. issued a $100 par value preferred stock that pays a 9 percent annual dividend. Due to changes in the overall economy and in the company’s financial condition, investors are now requiring a 10 percent return. What price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Exhibit 7.3 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   ​ Return Proxy True ​ of Radtron Specific Index General Index Period (Percent) (Percent) (Percent) 1 10 12 15 2 12 10 13 3 -10 -8 -8 4 -4 -10 0     Refer to Exhibit 7.3. The average proxy return is  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Boost pressure is generally measured in ___________.

If a digital meter face shows 0.93 when set to read kΩ, the reading means ________.

Horsepower is expressed in units of ________.