60.1K

Verified Solution

Link Copied!

PLEASE ANSWER ASAP WILL UPVOTE

PLEASE ANSWER ALLLL QUESTIONS THANK YOU!!

14

16

17

Preferred stock valuation Jenes Design wishes to estimate the value of its outstanding preferred stock. The preferred issue has a par value of $60 and pays an annual dividend of $6.70 per share. Similar-risk prefered slocks are currently earting an annual rate of retum of 9.3% a. What is the market value of the cutstanding prelered stock? b. If an ievestor purchases the prelened stock at the value caloulated in part a, how much does she gain or lose per share it she sels the stock when the required rotum on similar-isk preferred stocks has risen to 10.6% ? a. The market value of the outstanding preferred stock is: per share. (Flouns to the nearest cert.) b. If the required retum on similarrisk prefered stocks has risen to 10.6%, the value of the stock wil bo 5 per share. (Round to the nearest cert) If an investor purchased the prelerred atock at the value calculated in part a and sells the stock when the required return on similar-isk preferred stocks has risen to 10.6%, the gain or loss is 5 per share. (Round to the nearest cent. Enter a positive number for a gain and a negative number lor a loss) Today the common stock of Grecham Technology closed at $26.40 per share, down $0.40 from yesteeday. If the company has 4.2 millon shares outstanding and annual eamings of $9.4 millon, shat is its PlE ratio today? What was is PfE ratio yesterdar? The compary's PlE rato todny is (Round to tho decimal places.) The compary/s P/f rabe yesterday was (Round to two decimal places) Using the free eash flow valuation model to price an IPO Personal Finance Problem Assume that you bave an opportunily to buy the stock of CoolTech, Inc, an IPO being offered for 513 , 69 per share. Authough you are very much interested in owning the company, you are concemed about whether it is fairy priced. To delornine the value of the ahares, you hare deoided to apply the tree cask fow valuation model to the firm's financial dra that youlve acournulated from a variety of date sources. The key values you have coinplied are summarized in the following tabie. a. Use the free cash flow valuation model to estimale CoolTech's common shock value per share. b. Judging by your finding in part a and the slock's otering price, should you buy the stock? c. On turther anaysis, you find that the growth ratn in FCF beyond 2023 wil be 7% rather than 6%. What effect would tha fnding have an your responses in parts a and b? a. The value of CoolTechis ontre compary in 5 (Round to the neurest dollar) The value per share of CoolTechis common stock is 5 (Round to the nearest cent) b. On the basis of your finding in part a and the stock's offering price, should you buy the stock? (Seiect the best answer beiow) Yes No If the growh rate in FCF beyond 2023 wil be 7%, the value of Cooffectis entre corfpary wid be \& (Round to the nearest dollar) The value per share of Cooltech's eommon slock is 1 (Rlound to the neareat cent) On the basis of your finding in part c and the stock's offering price, should you buy the stcok? (Seect the best ansaer below) A. Yes b. No e. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the h flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have comp the free cash flow valuation model to estimate CoolTech's common stock value per share. ing by your finding in part a and the stock's offering price, should you buy the stock? irther analusis vou find that the orouth ratr in ECE hevond 2023 will be 7% rather than. 6% What effect would this findion have on your res Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.)

Answer & Explanation Solved by verified expert

See Answer