Business, 04.05.2021 20:40 cbaillie8462

The risk-free rate of return is 8%, the expected rate of return on the market portfolio is 15%, and the stock of Xyong Corporation has a beta of 1.2. Xyong pays out 40% of its earnings in dividends, and the latest earnings announced were $10 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyong will earn an ROE of 20% per year on all reinvested earnings forever. (a) What is the intrinsic value of a share of Xyong stock now?
(b) What is the intrinsic value of a share of Xyong stock one year from now?
(c) If the market price of a share is currently $100 and you expect the market price to be equal to the intrinsic value one year from now, what is your expected one-year holding period return on Xyong stock?

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 14:30

As he explores his options, sergio notices that some opportunities appear to be riskier than others. when considering various opportunities, sergio should keep in mind that:

Answers: 1

Answer

Business, 22.06.2019 04:50

Allie and sarah decided that they want to purchase renters insurance for the apartment they share. they made a list of all of the items to be covered by the insurance policy, along with their estimated values. if the items to be covered total more than $3000, the insurance company charges an annual premium of 23% of the total value of the items. if the items to be covered total $3000 or less, the insurance company charges an annual premium of 20% of the total value of the items.

Answers: 1

Answer

Business, 22.06.2019 11:20

Camilo is a self-employed roofer. he reported a profit of $30,000 on his schedule c. he had other taxable income of $5,000. he paid $3,000 for hospitalization insurance. his self-employment tax was $4,656. he paid his former wife $4,000 in court-ordered alimony and $4,000 in child support. what is the amount camilo can deduct in arriving at adjusted gross income (agi)?

Answers: 2

Answer

Business, 22.06.2019 15:20

On january 2, 2018, bering co. disposes of a machine costing $34,100 with accumulated depreciation of $18,369. prepare the entries to record the disposal under each of the following separate assumptions. exercise 8-24a part 2 2. the machine is traded in for a newer machine having a $50,600 cash price. a $16,238 trade-in allowance is received, and the balance is paid in cash. assume the asset exchange has commercial substance.

Answers: 2

Answer

You know the right answer?

The risk-free rate of return is 8%, the expected rate of return on the market portfolio is 15%, and...

Questions