Stocks

ADP, Inc. has decided to repurchase 600 shares of the 4,500 outstanding.

What will the price per share be after the repurchase is completed?

The capital structure weights used to compute a firm’s WACC will be affected by an increase in the firm’s beta. True False

How many days on average does it take a firm to sell an inventory item if the average inventory is $42,800, the cost of goods sold is 78% of sales, and the yearly sales are $311,400? The profit margin is 6% and the tax rate is 35%.

Al Oft, CEO of Balloons, Inc, predicts that the company will pay a steady dividend of $.75 per share in each of the next two years. After this, he expects the dividend to increase at a rate of 20% for years 3, 4, and 5. After year 5, the dividend will grow at a perpetual rate of 4%.

What is the market value of a share of stock in the company if the required rate of return is 10%?

Ajax common stock is expected to return 17 percent in a boom economy, 11 percent in normal economy, and 2 percent in a recession. The probability of a boom is 25 percent, of a normal economy is 70 percent, and of a recession is 5 percent.

What is the expected return of this stock?12.05 percent12.93 percent13.32 percent13.68 percentAnswer is A. How did this come to be? Please explain thanks

Solution:

Looking for help with your homework?
Grab a 30% Discount and Get your paper done!

30% OFF
Turnitin Report
Formatting
Title Page
Citation
Place an Order

Grab A 14% Discount on This Paper
Pages (550 words)
Approximate price: -