The risk free rate of return, Rrf, is 11%; the required rate of return on the market, Rm, is14%; and Schuler Company's stock has a beta coeffecient of 1.5. a. If the dividend expected during the coming year is $2.25 and the growth rate is a constant 5%, what is price should Schuler's stock sell? b. Now suppose the Federal Reserve Board increases the money supply causing the risk-free rate to drop to 9% & Rm to fall to 12%. What would this do to the price of the stock? c. In addition to the change in part(b), suppose investors' risk aversion declines; this fact combined with the decline in Rrf, causes Rm to fall to 11%. At what price would Schuler's stock sell? d. Now suppose Schuler has a change in management. The new team institutes policies that increase the growth rate to 6% as well as enhance revenues and profits so that the beta coefficient declines from 1.5 to 1.3. After implementing these changes and assuming that the expected dividend now increases to $2.27, what is Schuler's new equilibruim price? Reply With Quote,These are the rest of the questions. I would greatly appreciate your help. Thanks. KENDALL CORNERS INC RECENTLY REPORTED NET INCOME OF 3.1 MILLION AND DEPRECIATION OF $500,000.00. WHAT WAS ITS NET CASH FLOW ?ASSUME IT HAS NO AMORTIZATION. THE MOORE CORPORATION HAS OPERATING INCOME (EBIT) OF $75,000.00, THE COMPANY,S DEPRECIATION EXPENCE WAS $200,000.00. MOORE IS 100% EQUITY FINANCED, AND IT FACES A FOURTY PERCENT TAX RATE. WHAT IS THE COMPANY,S NET INCOME WHAT IS ITS NET CASH FLOW ? DONALDSON & SONS HAS AN ROA OF 10%, A 25 pofit margin, a return equity equal to 15%. WHAT IS THE FIRMS EQUITY MULTIPLIER ? Data for Morton Chip company and its industry, average follow; a. Calculate the indicated ratios for Morton. b. Construct the expected Dupont equation for both Morton and the industry. c. OutlineMorton?s Strength and weaknesses as revealed by your analysis. d. Supposed Morton has ddoubled his sales as well as its inventories, accounts receivables and common equity duing 2010. How would that information affect the validity of your ration analysis ?
Paper#13936 | Written in 18-Jul-2015Price : $25