Stock Valuation

1. Fundamental

Electrical (GE) has about 10.three billion shares glorious and the stock price is

$37.10. The P/E ratio is about 18.three. Calculate the market capitalization for

GE. (Roughly)

a. $679

billion

b. $188

billion

C. $382 billion

d. None of

the above

2. The Wall

Highway Journal quotation for a corporation has the subsequent values: Div: $1.12,

PE: 18.three, Shut: $37.22. Calculate the dividend payout ratio for the company

(Roughly).

a. 18%

B. 55%

c. 45%

d. None of

the above

three. If the

Wall Highway Journal Quotation for a corporation has the subsequent values shut:

55.14; Web chg: = +1.04; then the closing price for the stock for the sooner

shopping for and promoting day was?

a. $56.18

B. $54.10

c. $55.66

d. None of

the above

4. Large

Computer Agency’s stock is selling for $100 per share at current. It is anticipated

that this stock pays a dividend of 6 per share, after which be supplied

for $114 per share on the end of 1 yr. Calculate the anticipated value of

return for the shareholders.

A. 20%

b. 15%

c. 10%

d. 25%

5. The value

of a typical stock at current will rely upon:

a. Number of

shares glorious and the number of shareholders

B. The anticipated future dividends and the low price value

c. The Wall

Highway analysts

d. Present price

of the long run earnings per share

6. CK

Agency stockholders anticipate to acquire a year-end dividend of $5 per share and

then be supplied for $115 per share. If the required value of return for the

stock is 20%, what is the current price of the stock?

A. $100

b. $122

c. $132

d. $110

23

Junjie Liu â Econ 282 Observe

Plenty of Choice

eight. Deluxe

Agency expects to pay a dividend of $2 per share on the end of year-1, $three per

share on the end of yr -2 after which be supplied for $32 per share. If the required

value on the stock is 15%, what is the current price of the stock?

A. $28.20

b. $32.17

c. $32.00

d. None of

the given options

9. On line on line casino

Inc. is predicted to pay a dividend of $three per share on the end of year-1 (D1)

and these dividends are anticipated to develop at a relentless value of 6% per yr

with out finish. If the required value of return on the stock is 18%, what’s current

price of the stock at current?

A. $25

b. $50

c. $100

d. $54

10. The

fastened dividend progress methodology P0= Div1/ (r-g) assumes: I) the dividends are

rising at a relentless value g with out finish II) r > g III) g is never adversarial.

a. I solely

b. II solely

C. I and II solely

d. III solely

10. Will Co.

is predicted to pay a dividend of $2 per share on the end of yr -1(D1) and the

dividends are anticipated to develop at a relentless value of 4% with out finish. If the current

price of the stock is $20 per share calculate the anticipated return or the related payment

of equity capital for the company:

a. 10%

b. 4%

C. 14%

d. None of

the above

11. World-Tour

Co. has merely now paid a dividend of $2.83 per share (D0); the dividends are

anticipated to develop at a relentless value of 6% per yr with out finish. If the required

value of return on the stock is 16%, what is the current price on stock, after

paying the dividend?

a. $30

b. $56

C. $70

d. $48

12. The

anticipated value of return or the worth of equity capital is estimated as follows:

a. Dividend

yield – anticipated value of progress in dividends

B. Dividend yield + anticipated value of progress in dividends

c. Dividend

yield / anticipated value of progress in dividends

d. (Dividend

yield) * (anticipated value of progress in dividends)

24

Junjie Liu â Econ 282 Observe

Plenty of Choice

13. Dividend progress value for a safe company will likely be estimated

as:

a. Plow once more

value / the return on equity (ROE) B. Plow once more value * the return on equity

(ROE)

c. Plow

once more value + the return on equity (ROE)

d. Plow once more

value – the return on equity (ROE)

14. MJ Co.

pays out 60% of its earnings as dividends. Its return on equity is 15%. What’s

the safe dividend progress value for the company?

a. 9%

b. 5%

C. 6%

d. 15%

15. Michigan

Co. is at current paying a dividend of $2.00 per share. The dividends are anticipated

to develop at 20% per yr for the next four years after which develop 6% per yr

thereafter. Calculate the anticipated dividend in yr 5.

a. $4.15

b. $2.95

C. $4.40

d. $three.81

16. Good

Motor Agency is at current paying a dividend of $1.40 per yr. The dividends

are anticipated to develop at a value of 18% for the next three years after which a

fastened value of 5 % thereafter. What is the anticipated dividend per share in

yr 5?

a. $2.35

B. $2.54

c. $2.91

d. $1.50

17. The

In-Tech Co. has merely paid a dividend of $1 per share. The dividends are

anticipated to develop at 25% per yr for the next three years and on the worth of 5%

per yr thereafter. If the required value of return on the stock is 18%(APR),

what is the current price of the stock?

A. $12.97

b. $11.93

c. $15.20

d. None of

the above

18. R&D

Know-how Firm has merely paid a dividend of $zero.50 per share. The

dividends are anticipated to develop at 24% per yr for the next two years and at eight%

per yr thereafter. If the required value of return throughout the stock is 16% (APR),

calculate the current price of the stock.

a. $1.11

b. $7.71

C. $eight.82

d. Not one of many above

25

Junjie Liu â Econ 282 Observe

Plenty of Choice

19. Ocean Co.

has paid a dividend $2 per share out of earnings of $4 per share. If the book

price per share is $25, what is the anticipated progress value in dividends (g)?

a. 16%

b. 12%

C. eight%

d. 4%

20. Seven-Seas

Co. has paid a dividend $three per share out of earnings of $5 per share. If the

book price per share is $40 and the market price is 52.50 per share, calculate

the required value of return on the stock.

a. 12%

B. 11%

c. 5%

d. 6%

21. River Co.

has paid a dividend $2 per share out of earnings of $4 per share. If the book

price per share is $25 and is at current selling for $40 per share, calculate

the required value of return on the stock.

a. 15.2%

b. 7.2%

c. 14.7%

D. 13.4%

22. Lake Co.

has paid a dividend $three per share out of earnings of $5 per share. If the book

price per share is $40, what is the anticipated progress value in dividends?

a. 7.5%

b. eight%

c. 12.5%

D. 5%

23. The growth value in dividends is a carry out of two

ratios. They’re:

a. ROA and

ROE

b. Dividend

yield and progress value in dividends C. ROE and the Retention Ratio

d. Information

price per share and EPS

24. Agency X

has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings

per share of the company.

a. $6 per

share

b. $10 per

share

c. $zero.20

per share

D. $5 per share

26

Junjie Liu â Econ 282 Observe

Plenty of Choice

25. Which of the subsequent formulation referring to earnings to

price ratio is true:

a. EPS/Po =

r[1 + (PVGO/Po] B. EPS/Po = r[1 – (PVGO/Po)]

c. EPS/Po =

[r + (PVGO/Po)]

d. EPS/Po

=[r + (1+(PVGO/Po)]/r

26. Usually

extreme progress shares pay: A. Low or no dividends

b. Extreme

dividends

c. Erratic

dividends

d. Every A

and C

27. A extreme proportion

of the value a progress stock comes from:

a. Earlier

dividend funds

b. Earlier

earnings

C. PVGO (Present Price of the Growth Alternate options)

d. Every A

and B

28. Summer time season Co.

is predicted to pay a dividend or $4.00 per share out of earnings of $7.50 per

share. If the required value of return on the stock is 15% and dividends are

rising at a gift value of 10% per yr, calculate the present price of the

progress different for the stock (PVGO).

a. $80

B. $30

c. $50

d. $26

29. Parcel

Firm is predicted to pay a dividend of $5 per share subsequent yr, and the

dividends pay out ratio is 50%. If the dividends are anticipated to develop at a

fastened value of eight% with out finish and the required value of return on the stock is

13%, calculate the present price of the growth different.

a. $100

b. $76.92

C. $23.08

d. None of

the above

30. Frequent

Air is a no progress company and has two million shares glorious. It is anticipated

to earn a relentless 20 million per yr on its belongings. If all earnings are paid

out as dividends and the worth of capital is 10%, calculate the current price

per share for the stock.

a. $200

b. $150

C. $100 d. $50