2. 外语考试
  3. For the year just ended, N company had

For the year just ended, N company had

恬恬2019-12-17  22
问题 <P>For the year just ended,  N company had an earnings of$ 2 per share and paid a dividend of $ 1. 2 on its stock.  The growth rate in net income and dividend are both expected to be a constant 7 percent per year,  indefinitely.   N company has a Beta of 0. 8,  the risk - free interest rate is 6 percent, and the market risk premium is 8 percent.</P><P>P Company is very similar to N company in growth rate, risk and dividend. payout ratio.  It had 20 million shares outstanding and an earnings of $ 36 million for the year just ended. The earnings will increase to $ 38. 5 million the next year.</P><P>Requirement :</P><P>A.  Calculate the expected rate of return on N company 's equity.</P><P>B.  Calculate N Company 's current price-earning ratio and prospective price - earning ratio.</P><P>C.  Using N company 's current price-earning ratio, value P company 's stock price.</P><P>D.  Using N company 's prospective price - earning ratio,  value P company 's stock price.</P>
选项
答案
解析<P>A. The expected rate of return on N company's equity =6% +0. 8*8% =12.4%</P><P>B. Current price -earning ratio = (1. 2/2) * (1 +7% )/ (12.4% -7% ) =11. 89</P><P>Prospective price - earning ratio = (1. 2/2) / (12. 4% - 70% ) =11. 11</P><P>C. P company's stock = 11. 89* 36/20 = 21. 4</P><P>D. P company's stock = 11. 11* 38. 5/20 = 21. 39</P>
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