Answer:
answer is A) $206 B) $61.31
Explanation:
to calculate price of the stock at zero we use dividend discount model formula
P0= D(1+G)/(r-g)
10(1.03)/(0.08-0.03)
$206
b) The dividend is said to be 2% of the free cash flow therefore can be calculated as $10*0.2=$2 per share
then calculate divide growth rates
D1=2*1.3 =2.6
D2=2*(1.3)(1.3)=3.38
D3 = 2*(1.3)(1.3)(1.3)=4.394
Claculate the discount rate using CAPM according to given information
R= 0.2+ 1.5(0.08-0.02)
= 0.11/11%
Use the dividend discount model to calculate the price of the stock
P0= 2.6/1.11+3.38/1.3²+4.394*(1.05)/(0.11-0.05)
2.342+2.743+56.225
=$61.31
Answer:6000 prisoners
Explanation:
Profit per prisoners= $75-$50=$25
Prisoners to earn $100,000
let no of prisoners be x
$25*X-$50,000=$100,000
$25X= $100,000+$50,000
X= 150,000/25=6000
Answer:
The book value per share and earnings per share is $2.1809 and $1.025 respectively.
Explanation:
For computing the book value per share, we have to used the market to book ratio formula which is shown below:
Market to book ratio = Market price per share ÷ book value per share
9.4 times = $20.50 ÷ book value per share
So, book value per share = $20.50 ÷ 9.4 times
= $2.1809
Now, the earning per share is calculated by using a PE ratio which is displayed below:
PE ratio = Share price ÷ Earning per share
20 times = $20.50 ÷ Earning per share
So, earning per share = $20.50 ÷ 20 times
= $1.025
Hence, the book value per share and earnings per share is $2.1809 and $1.025 respectively.
Last option would be correct