Business, 07.11.2019 05:31 fallenangelsayshush

The risk-free rate of return is 6%, the expected rate of return on the market portfolio is 15%, and the stock of xyrong corporation has a beta coefficient of 2.3. xyrong pays out 45% of its earnings in dividends, and the latest earnings announced were $9.00 per share. dividends were just paid and are expected to be paid annually. you expect that xyrong will earn an roe of 18% per year on all reinvested earnings forever.

a. what is the intrinsic value of a share of xyrong stock? (do not round intermediate calculations. round your answer to 2 decimal places.)

b. if the market price of a share is currently $22, and you expect the market price to be equal to the intrinsic value one year from now, what is your expected 1-year holding-period return on xyrong stock? (do not round intermediate calculations. round your answer to 2 decimal places.)

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 18:50

Retirement investment advisors, inc., has just offered you an annual interest rate of 4.4 percent until you retire in 40 years. you believe that interest rates will increase over the next year and you would be offered 5 percent per year one year from today. if you plan to deposit $13,000 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit?

Answers: 3

Answer

Business, 22.06.2019 19:10

Pam is a low-risk careful driver and fran is a high-risk aggressive driver. to reveal their driver types, an auto-insurance company a. refuses to insure high-risk drivers b. charges a higher premium to owners of newer cars than to owners of older cars c. offers policies that enable drivers to reveal their private information d. uses a pooling equilibrium e. requires drivers to categorize themselves as high-risk or low-risk on the application form

Answers: 3

Answer

Business, 22.06.2019 19:20

Why is following an unrelated diversification strategy especially advantageous in an emerging economy? a. it allows the conglomerate to overcome institutional weaknesses in emerging economies. b. it allows the conglomerate to form a monopoly in emerging economies. c. it allows the conglomerate to use well-defined legal systems in emerging economies. d. it allows the conglomerate to take advantage of strong capital markets in emerging economies.

Answers: 1

Answer

Business, 22.06.2019 21:00

Describe what fixed costs and marginal costs mean to a company.

Answers: 1

Answer

You know the right answer?

The risk-free rate of return is 6%, the expected rate of return on the market portfolio is 15%, and...

Questions

Business, 28.12.2020 23:40

Given a prior forecast demand value of 1,100, a related actual demand value of 1,000, and a smoothing constant alpha of 0.3, what is the exponential s...