BUS 405 Week 2 Chapter 6 Common Stock Valuation
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01-02-2016, 10:03 PM
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BUS 405 Week 2 Chapter 6 Common Stock Valuation
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- We will provide you only with original study papers and guides - We will offer you plenty examination answers samples - Scholars hold advanced degrees in various disciplines and this fact increases our possibilities to provide online homework help - We are multi-segment team is consisted with professionals who are specialized in various fields of study - Our customers can find tutorial and guide work easily and quickly - No matter how hard your homework looks, we will always find someone who come with the best possible solutions and explanations BUS 405 Week 2 Chapter 6 Common Stock Valuation ![]() Follow the link Now for full guide - http://entire-courses.com/bus-405-week-2-chapter-6-common-stock-valuation BUS 405 Week 2 Chapter 6 Common Stock Valuation This pack of BUS 405 Week 2 Chapter 6 Common Stock Valuation contains: 1. Which one of the following terms is used to identify the evaluation method that determines the value of a stock by reviewing a firm's financial statement in conjunction with other financial and economic information? 2. The method of valuing a stock based on the present value of the future income derived from that stock is called: 3. The model used to value a stock that pays a dividend which increases at a constant rate forever is referred to as which one of the following? Assume the growth rate is less than the discount rate. 4. How is a sustainable dividend growth rate defined? 5. The portion of net income that is held by a firm, for future growth, comprises which one of the following balance sheet accounts? 6. What is the percentage of a firm's earnings that is distributed to shareholders called? 7. What is the percentage of a firm's net income which is reinvested in the firm to support future growth called? 8. The model used to value the stock of a firm which has a short-term growth rate that varies from its long-term growth rate is called the _____ dividend growth model. 9. What is beta? 10. What is the accounting relationship in which earnings per share minus dividends equal the change in book value per share called? 11. The Free Cash Flow Model: I. can be used to value a company with negative earnings II. is based on a firm having positive cash flows III. requires that a firm pay a dividend IV. directly estimates a value for a firm's equity 12. What is the market value of a share of stock divided by the net income per share called? 13. The net income per share divided by the market price per share is called the: 14. Growth stocks are frequently described as having which one of the following characteristics? 15. The price-book ratio is computed as the market value per share divided by the per share book value of: 16. A firm's current stock price divided by the firm's revenue per share is referred to as which one of the following ratios? 17. An analysis of which of the following are commonly included as part of fundamental analysis? I. sales II. book value III. earnings per share IV. cash flow 18. Based on the dividend discount model, an increase in which of the following will lower the current value of a stock? I. amount of the next dividend II. dividend growth rate III. discount rate 19. The dividend discount model assumes that: 20. The constant perpetual growth model assumes the: 21. The constant perpetual growth model is applicable primarily to those firms which: 22. Which one of the following is a correct formula for computing a geometric average dividend growth rate? 23. The arithmetic average dividend growth rate is: 24. The retention ratio is the: 25. An increase in the retention ratio will: 26. A decrease in which one of the following will increase a firm's sustainable rate of growth? 27. The sustainable growth rate is equal to: 28. Hypo Tech expects its net income to grow at 20 percent a year for the next two years and then taper off to a constant 5 percent annual rate of growth. The firm maintains a constant dividend payout ratio. Which one of the following models is best suited for computing the current value of this firm's stock? 29. Which one of the following is a requirement of the two-stage dividend growth model? 30. Which one of the following statements concerning beta is correct? 31. Which one of the following is correct concerning the two-stage dividend growth model? 32. How will the price of a stock be affected if the dividend growth rate is decreased? 33. Which one of the following will increase the current residual income of a firm? 34. Which one of the following models can be used to value the stock of a firm that maintains a one hundred percent retention ratio? 35. Which of the following have the same meaning as the term "economic value added"? I. abnormal earnings II. residual income III. value created by a firm in period t IV. EPSt - Bt-1 ? k 36. Which one of the following correctly expresses the clean surplus relationship? 37. Which one of the following statements related to the price-earnings (P/E) ratio is correct? 38. Which one of the following is used as an indicator that a firm has good-quality earnings? 39. Which one of the following is the most common definition of cash flow as used in the price-cash flow ratio? 40. The price-sales ratio helps measure the ability of a firm to generate: 41. You would like to know the value of a firm's equity today in relation to the cost of that equity. Which one of the following ratios will provide you with this information? 42. PT Boats plans to pay a $2.40 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 $12 a share. After that, the company plans to close its doors permanently. What is the current value of this stock at a discount rate of 16 percent? 43. Upwind Tours just announced that it will pay an annual dividend of $3.60 a share one year from now. Two years from now, the company expects to pay a $28 a share liquidating dividend. After that, the company will cease operations. What is the current value per share at a discount rate of 12.5 percent? 44. Lakeside Sheet Metal is downsizing and plans on completely closing 3 years from now. The firm's liquidation plan calls for annual dividends of $2, $4, and $35 over the next 3 years, respectively. What is the current value of this stock given a discount rate of 14 percent? 45. Barn Wood Interiors announced today that it is going out of business. As of today, no more regular dividends will be paid. The firm will, however, pay two liquidating dividends. The first will be paid one year from now in the amount of $14 a share. The second and final payment will be paid two years from now at an estimated $38 a share. What is the value of this stock today at a discount rate of 18.7 percent? 46. Blue Water Tours just paid an annual dividend of $0.72 a share. The firm has a policy of increasing the dividend by 3.0 percent annually. What is the current value of this stock at a discount rate of 11.7 percent? 47. Precision Engineering recently announced that its next annual dividend will be $1.20 per share with later dividends increasing by 2.5 percent annually. What is the current value of this stock to you if you require a 12 percent rate of return? 48. The Fish House increases its dividend each year. The next annual dividend is expected to be $2.21 a share. Future dividends will increase by 3.5 percent annually. What is the current value of this stock if the discount rate is 12 percent? 49. Long Life Floors just paid an annual dividend of $0.82 a share and plans on increasing future dividends by 2 percent annually. The discount rate is 15 percent. What will the value of this stock be 5 years from today? 50. Wilson's Furniture is experiencing good growth so has decided to commence paying dividends starting next year. The first dividend will be $0.50 a share with annual increases of 4 percent in the dividend amount. The discount rate is 11 percent. What will the value of this stock be three years from now? 51. The Back Room just paid an annual dividend of $1.65 a share. The firm expects to pay dividends forever and to increase the dividend by 3 percent annually. What is the expected value of this stock five years from now if the discount rate is 14 percent? 52. Main Street Antiques is planning on paying an annual dividend of $2.60 per share next year. The company is slowly downsizing and is decreasing its dividend by 2 percent annually. What is the current value of this stock at a discount rate of 12 percent? 53. You are considering buying shares of stock in the Steel Mill. The forecast for the firm is steady growth over the next decade. The firm just paid its annual dividend of $1.42 per share and has plans to increase that amount by 4 percent annually indefinitely. You require a 12.5 percent return on this type of security. What is your estimate of the value of this stock ten years from now? 54. DT Industries stock is valued at $9.60 a share. The firm pays annual dividends at an increasing rate of 2 percent annually. Next year's dividend will be $1.50 per share. What is the required return on this stock? 55. Wholesale Foods common stock is valued at $11.05 per share. The firm pays annual dividends which increase at a constant rate. The last dividend paid was $1.20. The required return is 12 percent. What is the dividend growth rate? 56. A stock sells for $14.85 a share and has a required return of 14 percent. Dividends are paid annually and increase at a constant 3 percent per year. What is the amount of the last dividend paid? 57. Factory Stores pays annual dividends and increases those dividends by 2 percent each year. The stock is currently valued at $12 a share and has a required return of 16 percent. You own 400 shares of this stock. What is the total amount of dividend income you should expect to receive next year? 58. The common stock of JL Recyclers has a required return of 14 percent and a current value of $18.72. The company pays its dividend annually and increases the amount by 4 percent each year. You own 200 shares of this stock. What was the total amount of the last dividend you received? 59. The Rug Barn has paid annual dividends of $1.30, $1.36, $1.40, $1.42, and $1.45 over the last 5 years, respectively. What is the geometric average dividend growth rate? 60. A firm has paid annual dividends of $1.45, $1.53, $1.55, $1.60, $1.62, and $1.66 per share over the past 6 years, respectively. What is the geometric average growth rate for these dividends? 61. Over the past 5 years, DL Insulation has paid annual dividends of $1.40, $1.55, $1.70, $1.73, and $1.77 per share. What is the geometric average dividend growth rate for this period? 62. The Brown Jug has paid annual dividends of $0.61, $0.65, $0.70, $0.80, and $0.88 per share over the past 5 years, respectively. What is the geometric average dividend growth rate for this period? 63. Dennison Mfg. pays annual dividends. For the past six years, the firm has paid dividends of $1.10, $1.12, $1.25, $1.28, $1.30, and $1.40, respectively. What is the geometric average dividend growth rate for this time period? 64. Over the past 4 years, a local firm has paid annual dividends of $1.62, $1.65, $1.70, and $1.74. What is the arithmetic average dividend growth rate? 65. Blue Water Tours has paid annual dividends of $2.10, $2.12, $2.15, $2.15, and $2.22 over the past 5 years, respectively. What is the arithmetic average growth rate for these dividends? 66. Knit ![]() ETH 316 Week 5 DQ 2 BUS 201 Week 5 DQ 1 Factor for Effective Communication FIS 240 Investment Policy and Portfolio Evaluation PSY 285 Week 4 CheckPoint Obedience BSHS 442 Week 3 Learning Team Mediator Interview Summary ACC 561 Week 1 Discussion Question 3 GBM 489 Week 3 DQs LIT 210 CheckPoint Newspaper Ads for Dramatic Characters COM 200 Week 2 Discussion 1 Improving Verbal Communication HUM 111 Week 6 DQs CJS 200 Entire Course ABS 415 Week 3 Discussion Question 2 Leadership In a Crisis ACC 225 Week 4 Exercise 4-5 MAT 117 Week 1 DQ 1 Additional Responses and Participation ACC 300 Week 2 Individual Problem Set P1-3A and P3-5A BUS 650 Week 4 DQs CJA 394 Week 3 DQ 1 SCI 201 Week 1 Individual Assignment CAM Therapeutic Modalities Paper HCA 421 Week 2 DQ 1 Strategic External Assessment Industry and Competition PSY 310 Week 4 DQ 2 AED 200 Students Rights and Teachers Responsibilities A STR 581 Week 2 Individual Assignment COM 345 Week 4 DQ 1 Using Media Writing Tools PSYCH 515 Week 3 DQ 1 ACC 561 Assignment Week 5 CVP And Break-Even Analysis Paper LAWS 310 Week 3 DQ 1 Who owns the house HRM 586 Week 3 DQ 2 The Future of Unions QNT 351 Week 3 DQ 4 ACC 349 E5 12.1 IT 220 Week 3 CheckPoint File Transfer Protocol FTP GBM 380 Week 3 Individual Assignment Concepts of Culture COM 340 Week 3 DQ 1 Defining Terms CJA 234 Week 3 Correctional System QA Response HCA 497 Week 3 Cost Containment and Malpractice Claims Article Review MKTG 420 Week 4 You Decide District Sales Manager HCS 455 Week 4 DQ 1 CJA 453 Week 5 DQ and Summary MGT 307 Week 5 Characteristics ACC 306 Week 1 P12-10 Runyan Bakery QNT 351 Week 2 Learning Team Paper Data Collection PSY 211 Week 3 DQ4 PHI 200 Week 3 Rough Draft EDU 304 Week 3 DQ 2 Aligning Instruction with Federal Legislation PSY 322 Week 3 Individual Assignment Marketing Research and Promotional Message ACC 291 Week 4 Discussion Question 2 MGT 230 Week 5 Learning Team Assignment Management and Leadership Presentation Revision HSM 340 WEEK 1 Assignment COM 155 Week 4 DQ ECO 450 Week 5 Mid Term BSA 411 Week 3 Modeling Methodologies MGT 431 Week 1 DQ 4 HRM 420 Week 2 Quiz http://ecroud.com/showthread.php?tid=2790 IT 286 Week 4 Checkpoint Toolwire Lab Troubleshooting the Windows 7 Operating Systems HCR 240 CheckPoint HIPAA and Information Technology POS 421 Week 2 Individual Assignment v7 SPE 576 Week 5 Team Assignment Journal Article Review 4 (Autism) CJA 484 Week 2 Individual Assignment Organizational Management and Operations Paper SPE 556 Week 1 DQ 2 CJA 214 Week 3 Learning Team Policing Organizations Q A Responses COM 150 Week 7 Discussion Question 1 PSYCH 515 Week 1 Assignment Introductory Case Study IT 236 Set 2 Week 4 CheckPoint Navigation ACC 421 Week 1 Assignment Accounting Cycle Paper - We help students in their studies - All delivered materials are projected for reference purposes only - You have a chance to preview some of their completed works as well as their past ratings - We can offer you generous discounts program for our future cooperation - We always work on creating and upgrading our great tutorial base - Our customers can find tutorial and guide work easily and quickly - No matter how hard your homework looks, we will always find someone who come with the best possible solutions and explanations BUS 405 Week 2 Chapter 6 Common Stock Valuation ![]() Follow the link Now for full guide - http://entire-courses.com/bus-405-week-2-chapter-6-common-stock-valuation BUS 405 Week 2 Chapter 6 Common Stock Valuation This pack of BUS 405 Week 2 Chapter 6 Common Stock Valuation contains: 1. Which one of the following terms is used to identify the evaluation method that determines the value of a stock by reviewing a firm's financial statement in conjunction with other financial and economic information? 2. The method of valuing a stock based on the present value of the future income derived from that stock is called: 3. The model used to value a stock that pays a dividend which increases at a constant rate forever is referred to as which one of the following? Assume the growth rate is less than the discount rate. 4. How is a sustainable dividend growth rate defined? 5. The portion of net income that is held by a firm, for future growth, comprises which one of the following balance sheet accounts? 6. What is the percentage of a firm's earnings that is distributed to shareholders called? 7. What is the percentage of a firm's net income which is reinvested in the firm to support future growth called? 8. The model used to value the stock of a firm which has a short-term growth rate that varies from its long-term growth rate is called the _____ dividend growth model. 9. What is beta? 10. What is the accounting relationship in which earnings per share minus dividends equal the change in book value per share called? 11. The Free Cash Flow Model: I. can be used to value a company with negative earnings II. is based on a firm having positive cash flows III. requires that a firm pay a dividend IV. directly estimates a value for a firm's equity 12. What is the market value of a share of stock divided by the net income per share called? 13. The net income per share divided by the market price per share is called the: 14. Growth stocks are frequently described as having which one of the following characteristics? 15. The price-book ratio is computed as the market value per share divided by the per share book value of: 16. A firm's current stock price divided by the firm's revenue per share is referred to as which one of the following ratios? 17. An analysis of which of the following are commonly included as part of fundamental analysis? I. sales II. book value III. earnings per share IV. cash flow 18. Based on the dividend discount model, an increase in which of the following will lower the current value of a stock? I. amount of the next dividend II. dividend growth rate III. discount rate 19. The dividend discount model assumes that: 20. The constant perpetual growth model assumes the: 21. The constant perpetual growth model is applicable primarily to those firms which: 22. Which one of the following is a correct formula for computing a geometric average dividend growth rate? 23. The arithmetic average dividend growth rate is: 24. The retention ratio is the: 25. An increase in the retention ratio will: 26. A decrease in which one of the following will increase a firm's sustainable rate of growth? 27. The sustainable growth rate is equal to: 28. Hypo Tech expects its net income to grow at 20 percent a year for the next two years and then taper off to a constant 5 percent annual rate of growth. The firm maintains a constant dividend payout ratio. Which one of the following models is best suited for computing the current value of this firm's stock? 29. Which one of the following is a requirement of the two-stage dividend growth model? 30. Which one of the following statements concerning beta is correct? 31. Which one of the following is correct concerning the two-stage dividend growth model? 32. How will the price of a stock be affected if the dividend growth rate is decreased? 33. Which one of the following will increase the current residual income of a firm? 34. Which one of the following models can be used to value the stock of a firm that maintains a one hundred percent retention ratio? 35. Which of the following have the same meaning as the term "economic value added"? I. abnormal earnings II. residual income III. value created by a firm in period t IV. EPSt - Bt-1 ? k 36. Which one of the following correctly expresses the clean surplus relationship? 37. Which one of the following statements related to the price-earnings (P/E) ratio is correct? 38. Which one of the following is used as an indicator that a firm has good-quality earnings? 39. Which one of the following is the most common definition of cash flow as used in the price-cash flow ratio? 40. The price-sales ratio helps measure the ability of a firm to generate: 41. You would like to know the value of a firm's equity today in relation to the cost of that equity. Which one of the following ratios will provide you with this information? 42. PT Boats plans to pay a $2.40 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 $12 a share. After that, the company plans to close its doors permanently. What is the current value of this stock at a discount rate of 16 percent? 43. Upwind Tours just announced that it will pay an annual dividend of $3.60 a share one year from now. Two years from now, the company expects to pay a $28 a share liquidating dividend. After that, the company will cease operations. What is the current value per share at a discount rate of 12.5 percent? 44. Lakeside Sheet Metal is downsizing and plans on completely closing 3 years from now. The firm's liquidation plan calls for annual dividends of $2, $4, and $35 over the next 3 years, respectively. What is the current value of this stock given a discount rate of 14 percent? 45. Barn Wood Interiors announced today that it is going out of business. As of today, no more regular dividends will be paid. The firm will, however, pay two liquidating dividends. The first will be paid one year from now in the amount of $14 a share. The second and final payment will be paid two years from now at an estimated $38 a share. What is the value of this stock today at a discount rate of 18.7 percent? 46. Blue Water Tours just paid an annual dividend of $0.72 a share. The firm has a policy of increasing the dividend by 3.0 percent annually. What is the current value of this stock at a discount rate of 11.7 percent? 47. Precision Engineering recently announced that its next annual dividend will be $1.20 per share with later dividends increasing by 2.5 percent annually. What is the current value of this stock to you if you require a 12 percent rate of return? 48. The Fish House increases its dividend each year. The next annual dividend is expected to be $2.21 a share. Future dividends will increase by 3.5 percent annually. What is the current value of this stock if the discount rate is 12 percent? 49. Long Life Floors just paid an annual dividend of $0.82 a share and plans on increasing future dividends by 2 percent annually. The discount rate is 15 percent. What will the value of this stock be 5 years from today? 50. Wilson's Furniture is experiencing good growth so has decided to commence paying dividends starting next year. The first dividend will be $0.50 a share with annual increases of 4 percent in the dividend amount. The discount rate is 11 percent. What will the value of this stock be three years from now? 51. The Back Room just paid an annual dividend of $1.65 a share. The firm expects to pay dividends forever and to increase the dividend by 3 percent annually. What is the expected value of this stock five years from now if the discount rate is 14 percent? 52. Main Street Antiques is planning on paying an annual dividend of $2.60 per share next year. The company is slowly downsizing and is decreasing its dividend by 2 percent annually. What is the current value of this stock at a discount rate of 12 percent? 53. You are considering buying shares of stock in the Steel Mill. The forecast for the firm is steady growth over the next decade. The firm just paid its annual dividend of $1.42 per share and has plans to increase that amount by 4 percent annually indefinitely. You require a 12.5 percent return on this type of security. What is your estimate of the value of this stock ten years from now? 54. DT Industries stock is valued at $9.60 a share. The firm pays annual dividends at an increasing rate of 2 percent annually. Next year's dividend will be $1.50 per share. What is the required return on this stock? 55. Wholesale Foods common stock is valued at $11.05 per share. The firm pays annual dividends which increase at a constant rate. The last dividend paid was $1.20. The required return is 12 percent. What is the dividend growth rate? 56. A stock sells for $14.85 a share and has a required return of 14 percent. Dividends are paid annually and increase at a constant 3 percent per year. What is the amount of the last dividend paid? 57. Factory Stores pays annual dividends and increases those dividends by 2 percent each year. The stock is currently valued at $12 a share and has a required return of 16 percent. You own 400 shares of this stock. What is the total amount of dividend income you should expect to receive next year? 58. The common stock of JL Recyclers has a required return of 14 percent and a current value of $18.72. The company pays its dividend annually and increases the amount by 4 percent each year. You own 200 shares of this stock. What was the total amount of the last dividend you received? 59. The Rug Barn has paid annual dividends of $1.30, $1.36, $1.40, $1.42, and $1.45 over the last 5 years, respectively. What is the geometric average dividend growth rate? 60. A firm has paid annual dividends of $1.45, $1.53, $1.55, $1.60, $1.62, and $1.66 per share over the past 6 years, respectively. What is the geometric average growth rate for these dividends? 61. Over the past 5 years, DL Insulation has paid annual dividends of $1.40, $1.55, $1.70, $1.73, and $1.77 per share. What is the geometric average dividend growth rate for this period? 62. The Brown Jug has paid annual dividends of $0.61, $0.65, $0.70, $0.80, and $0.88 per share over the past 5 years, respectively. What is the geometric average dividend growth rate for this period? 63. Dennison Mfg. pays annual dividends. For the past six years, the firm has paid dividends of $1.10, $1.12, $1.25, $1.28, $1.30, and $1.40, respectively. What is the geometric average dividend growth rate for this time period? 64. Over the past 4 years, a local firm has paid annual dividends of $1.62, $1.65, $1.70, and $1.74. What is the arithmetic average dividend growth rate? 65. Blue Water Tours has paid annual dividends of $2.10, $2.12, $2.15, $2.15, and $2.22 over the past 5 years, respectively. What is the arithmetic average growth rate for these dividends? 66. Knit ![]() HCA 375 Week 2 DQ 1 HUM 130 Week 8 DQ 2 ESE 697 Week 5 Dq 1 Planning Vocabulary Instruction Based on IEP Objectives and Individualized Needs MAT 209 Entire Course AET 515 Week 2 DQ2 COM 135 Week 4 Discussion Questions POL 215 Roles Within the State Matrix MTH 157 Week 3 Checkpoint COM 321 Week 5 DQ 2 HSM 270 Week 7 CheckPoint Program Improvement Opportunities SOC 331 Week 2 DQ 1 Justice from Four Perspectives Family Community State and Nation CJA 474 Week 5 Learning Team Assignment Discussion Question PAD 530-Assignment 2 Evaluation of Agencys Public Personnel Administration MGT 426 Week 3 Resistance to Change BUS 670 Week 4 Legal and Ethical Issues AET 510 Week 1 DQ3 PSY 428 Week 2 DQ 1 CMGT 445 v4 Week 2 Individual Assignment Managerial Issues MGT 434 Week 4 Discussion Questions 4 CJA 363 aka CJA 304 Week 1 DQ 2 BSA 411 Week 4 Process Analysis and System Concept Development CJA 224 Week 5 Individual Assignment Restorative Justice Paper CRJ 305 Week 2 DQ 2 Name of Discussion DBM 380 Week 2 Learning Team Charter PSY 331 Week 3 Assignment Final Paper Outline Annotated Bibliography BSHS 442 Week 1 Individual Assignment Specific Population and the Advocate Role Paper PSY 201 Week 9 Discussion Questions ACC 306 Week 2 P 15-3 Rand Medical ESE 631 Week 1 DQ 1 LRE and FAPE EDU 645 Week 3 DQ 2 Performance Authentic Assessments EED 430 Week 1 Individual Assignment Personal Perspective and Professional Ethics CJS 210 Week 6 Check Point Reactive Patrol Response BSHS 305 Week 4 DQ 1 MGT 465 Week 2 DQ 3 HHS 265 Entire Course MGT 216 Week 4 Summary CMGT 578 Week 5 DQ and Summary CJA 384 Week 2 Individual Assignment Models of Organized Crime Executive Summary ETHC 445 Week 7 DQ 2 Assemble and Test Your Personal Ethics Statement RES 531 Week 11 Research Proposal Paper-Final Project Paper COM 215 Week 2 Communication Strategies HSM 330 Week 2 DQ 2 EHR Applications and HIEs EDU 623 Week 1 Assignment No Child Left Behind MGT 322 Week 2 Assignment Global Strategy 1 ACC 557 Week 2 Individual Assignment Procedures to collect accounting evidence MGT 401 Week 1 Quiz HIS 135 WEEK 6 Discussion Question 1 MGT 527 Week 5 DQ 2 HCS 449 Week 4 DQ 2 SEC 470 Week 5 Team Assignment Homeland Security Paper HTT 250 Week 2 CheckPoint Hotel Price Comparison ACC 541 Week 6 Auditing a Publicly Traded Company FIN 415 Week 5 Presentation SCI 362 Week 4 DQ 1 - Every single professional that works with you is an expert in his/her specific area of study - All delivered materials are projected for reference purposes only - You have a chance to preview some of their completed works as well as their past ratings - We can offer you generous discounts program for our future cooperation - We always work on creating and upgrading our great tutorial base - Our customers can find tutorial and guide work easily and quickly - No matter how hard your homework looks, we will always find someone who come with the best possible solutions and explanations BUS 405 Week 2 Chapter 6 Common Stock Valuation ![]() Follow the link Now for full guide - http://entire-courses.com/bus-405-week-2-chapter-6-common-stock-valuation BUS 405 Week 2 Chapter 6 Common Stock Valuation This pack of BUS 405 Week 2 Chapter 6 Common Stock Valuation contains: 1. Which one of the following terms is used to identify the evaluation method that determines the value of a stock by reviewing a firm's financial statement in conjunction with other financial and economic information? 2. The method of valuing a stock based on the present value of the future income derived from that stock is called: 3. The model used to value a stock that pays a dividend which increases at a constant rate forever is referred to as which one of the following? Assume the growth rate is less than the discount rate. 4. How is a sustainable dividend growth rate defined? 5. The portion of net income that is held by a firm, for future growth, comprises which one of the following balance sheet accounts? 6. What is the percentage of a firm's earnings that is distributed to shareholders called? 7. What is the percentage of a firm's net income which is reinvested in the firm to support future growth called? 8. The model used to value the stock of a firm which has a short-term growth rate that varies from its long-term growth rate is called the _____ dividend growth model. 9. What is beta? 10. What is the accounting relationship in which earnings per share minus dividends equal the change in book value per share called? 11. The Free Cash Flow Model: I. can be used to value a company with negative earnings II. is based on a firm having positive cash flows III. requires that a firm pay a dividend IV. directly estimates a value for a firm's equity 12. What is the market value of a share of stock divided by the net income per share called? 13. The net income per share divided by the market price per share is called the: 14. Growth stocks are frequently described as having which one of the following characteristics? 15. The price-book ratio is computed as the market value per share divided by the per share book value of: 16. A firm's current stock price divided by the firm's revenue per share is referred to as which one of the following ratios? 17. An analysis of which of the following are commonly included as part of fundamental analysis? I. sales II. book value III. earnings per share IV. cash flow 18. Based on the dividend discount model, an increase in which of the following will lower the current value of a stock? I. amount of the next dividend II. dividend growth rate III. discount rate 19. The dividend discount model assumes that: 20. The constant perpetual growth model assumes the: 21. The constant perpetual growth model is applicable primarily to those firms which: 22. Which one of the following is a correct formula for computing a geometric average dividend growth rate? 23. The arithmetic average dividend growth rate is: 24. The retention ratio is the: 25. An increase in the retention ratio will: 26. A decrease in which one of the following will increase a firm's sustainable rate of growth? 27. The sustainable growth rate is equal to: 28. Hypo Tech expects its net income to grow at 20 percent a year for the next two years and then taper off to a constant 5 percent annual rate of growth. The firm maintains a constant dividend payout ratio. Which one of the following models is best suited for computing the current value of this firm's stock? 29. Which one of the following is a requirement of the two-stage dividend growth model? 30. Which one of the following statements concerning beta is correct? 31. Which one of the following is correct concerning the two-stage dividend growth model? 32. How will the price of a stock be affected if the dividend growth rate is decreased? 33. Which one of the following will increase the current residual income of a firm? 34. Which one of the following models can be used to value the stock of a firm that maintains a one hundred percent retention ratio? 35. Which of the following have the same meaning as the term "economic value added"? I. abnormal earnings II. residual income III. value created by a firm in period t IV. EPSt - Bt-1 ? k 36. Which one of the following correctly expresses the clean surplus relationship? 37. Which one of the following statements related to the price-earnings (P/E) ratio is correct? 38. Which one of the following is used as an indicator that a firm has good-quality earnings? 39. Which one of the following is the most common definition of cash flow as used in the price-cash flow ratio? 40. The price-sales ratio helps measure the ability of a firm to generate: 41. You would like to know the value of a firm's equity today in relation to the cost of that equity. Which one of the following ratios will provide you with this information? 42. PT Boats plans to pay a $2.40 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 $12 a share. After that, the company plans to close its doors permanently. What is the current value of this stock at a discount rate of 16 percent? 43. Upwind Tours just announced that it will pay an annual dividend of $3.60 a share one year from now. Two years from now, the company expects to pay a $28 a share liquidating dividend. After that, the company will cease operations. What is the current value per share at a discount rate of 12.5 percent? 44. Lakeside Sheet Metal is downsizing and plans on completely closing 3 years from now. The firm's liquidation plan calls for annual dividends of $2, $4, and $35 over the next 3 years, respectively. What is the current value of this stock given a discount rate of 14 percent? 45. Barn Wood Interiors announced today that it is going out of business. As of today, no more regular dividends will be paid. The firm will, however, pay two liquidating dividends. The first will be paid one year from now in the amount of $14 a share. The second and final payment will be paid two years from now at an estimated $38 a share. What is the value of this stock today at a discount rate of 18.7 percent? 46. Blue Water Tours just paid an annual dividend of $0.72 a share. The firm has a policy of increasing the dividend by 3.0 percent annually. What is the current value of this stock at a discount rate of 11.7 percent? 47. Precision Engineering recently announced that its next annual dividend will be $1.20 per share with later dividends increasing by 2.5 percent annually. What is the current value of this stock to you if you require a 12 percent rate of return? 48. The Fish House increases its dividend each year. The next annual dividend is expected to be $2.21 a share. Future dividends will increase by 3.5 percent annually. What is the current value of this stock if the discount rate is 12 percent? 49. Long Life Floors just paid an annual dividend of $0.82 a share and plans on increasing future dividends by 2 percent annually. The discount rate is 15 percent. What will the value of this stock be 5 years from today? 50. Wilson's Furniture is experiencing good growth so has decided to commence paying dividends starting next year. The first dividend will be $0.50 a share with annual increases of 4 percent in the dividend amount. The discount rate is 11 percent. What will the value of this stock be three years from now? 51. The Back Room just paid an annual dividend of $1.65 a share. The firm expects to pay dividends forever and to increase the dividend by 3 percent annually. What is the expected value of this stock five years from now if the discount rate is 14 percent? 52. Main Street Antiques is planning on paying an annual dividend of $2.60 per share next year. The company is slowly downsizing and is decreasing its dividend by 2 percent annually. What is the current value of this stock at a discount rate of 12 percent? 53. You are considering buying shares of stock in the Steel Mill. The forecast for the firm is steady growth over the next decade. The firm just paid its annual dividend of $1.42 per share and has plans to increase that amount by 4 percent annually indefinitely. You require a 12.5 percent return on this type of security. What is your estimate of the value of this stock ten years from now? 54. DT Industries stock is valued at $9.60 a share. The firm pays annual dividends at an increasing rate of 2 percent annually. Next year's dividend will be $1.50 per share. What is the required return on this stock? 55. Wholesale Foods common stock is valued at $11.05 per share. The firm pays annual dividends which increase at a constant rate. The last dividend paid was $1.20. The required return is 12 percent. What is the dividend growth rate? 56. A stock sells for $14.85 a share and has a required return of 14 percent. Dividends are paid annually and increase at a constant 3 percent per year. What is the amount of the last dividend paid? 57. Factory Stores pays annual dividends and increases those dividends by 2 percent each year. The stock is currently valued at $12 a share and has a required return of 16 percent. You own 400 shares of this stock. What is the total amount of dividend income you should expect to receive next year? 58. The common stock of JL Recyclers has a required return of 14 percent and a current value of $18.72. The company pays its dividend annually and increases the amount by 4 percent each year. You own 200 shares of this stock. What was the total amount of the last dividend you received? 59. The Rug Barn has paid annual dividends of $1.30, $1.36, $1.40, $1.42, and $1.45 over the last 5 years, respectively. What is the geometric average dividend growth rate? 60. A firm has paid annual dividends of $1.45, $1.53, $1.55, $1.60, $1.62, and $1.66 per share over the past 6 years, respectively. What is the geometric average growth rate for these dividends? 61. Over the past 5 years, DL Insulation has paid annual dividends of $1.40, $1.55, $1.70, $1.73, and $1.77 per share. What is the geometric average dividend growth rate for this period? 62. The Brown Jug has paid annual dividends of $0.61, $0.65, $0.70, $0.80, and $0.88 per share over the past 5 years, respectively. What is the geometric average dividend growth rate for this period? 63. Dennison Mfg. pays annual dividends. For the past six years, the firm has paid dividends of $1.10, $1.12, $1.25, $1.28, $1.30, and $1.40, respectively. What is the geometric average dividend growth rate for this time period? 64. Over the past 4 years, a local firm has paid annual dividends of $1.62, $1.65, $1.70, and $1.74. What is the arithmetic average dividend growth rate? 65. Blue Water Tours has paid annual dividends of $2.10, $2.12, $2.15, $2.15, and $2.22 over the past 5 years, respectively. What is the arithmetic average growth rate for these dividends? 66. Knit ![]() BUS 311 Week 1 DQ 1 AYER Ethical Decision EDU 315 Week 3 DQ 2 BUS 518 Assignment 3 Developing a Missile, The Power of Autonomy and Learning CMGT 445 v4 Week 5 DQs PSYCH 540 Week 4 DQ 2 SCI 201 Week 2 Learning Team Assignment Regulatory Issues in CAM Paper http://www.veja.org/modules.php?name=Forums&file=viewtopic&p=5555&sid=d55db9c5a91b83d686d96d1a143146af#5555 COM 530 Week 1 DQs IT 241 Week 1 Checkpoint SCI 164 Week 4 The PresidentG http://www.companynews.biz/index.php/topic,2545086.new.html#new BUS 518 Entire Course LTC 315 Week 3 Team Assignment Executive Summary Part II COM 140 Entire Course SCI 164 Week 4 Checkpoint Physical Activity AJS 592 Week 1 DQ2 BUS 401 Week 4 DQ 1 Leverage COMM 102 Week 4 Learning Team Assignment Effective Group Communication Action Plan COMM 470 Week 5 Learning Team Assignment Communication Consultants Presentation HUM 130 New Version Jihad In Islam AED 202 Week 3 CheckPoint Stages of Cognitive Development HCA 421 Entire Course BSHS 335 Week 1 Applying Ethics in Practice WEB 435 Week 4 Homepage Organization ARTS 125 Week 4 DQ4 BIO 101 Entire Course NETW 208 Week 2 Quiz HPE 170 Week 3 Learning Team Physical Exercise Training Program Outline PSYCH 555 Entire Course HIST 405 Quiz Week 4 PSY 103 Week 2 Learning Experience Paper Psychology Class BUS 600 Week 5 News Article BIO 240 Entire Course CRJ 306 Week 4 DQ 2 Identity Theft HIS 303 Week 1 DQ 1 English Politics and Political Traditions PA 584 Week 3 DQ 1 Why Do We Have So Many Governments MGT 449 Week 2 Individual Assignment Effects of Quality Management on Domestic and Global Competition Paper PSY 430 Week 5 DQ 4 BSHS 352 Week 3 DQs POS 110 Week 4 Discussion Questions MGT 521 Week 2 Learning Team Weekly Reflection HCS 465 Week 2 DQ 3 COM 345 Week 3 DQ 2 Reaching your Target Audience CJS 220 Week 1 Discussion Question 2 BUS 611 Entire Course QNT 561 Week 2 Learning Team Assignment Business Research Methods Part 1 HRM 594 Week 2 Tanglewood Case 1 Solution PHI 208 Truth And The Limits Of Knowledge MGT 521 Week 1 DQ 3 EDU 695 Week 2 DQ 1 What is Action Research_ ADJ 235 Week 6 Checkpoint Attorneys Obligations IT 280 Week 1 Discussion Question 1 WEB 236 Week 1 DQ 2 SCI 207 Week 1 DQ 1 ECO 203 Week 4 DQ 1 Federal Reserve Bank Policy during the 2007-2008 Recession CJA 374 Week 1 DQs and Summary GEN 105 Week 6 Time Management Activity Checkpoint BUS 505 Week 4 Discussion 1 COLL 148 Week 1 DQ 2 Developing Potential PHI 105 Week 4 DQ 2 CJA 394 Week 1 DQ 2 HIS 135 WEEK 4 Discussion Question 1 Here is my website ... buy a school essay |
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