You expect that Mabanee will have earnings per share of $2.1 for the coming year. Mabanee plans to retain all of its earnings for the next 3 years. For the subsequent two years, the firm plans on retaining 50% of its earnings. It will then retain only 25% of its earnings from that point forward. Retained earnings will be invested in projects with an expected return of 20% per year. If Mabanee's equity cost of capital is 16% and WACC is 8%, then what is the stock price today?

Answers

Answer 1

The stock price today for Mabanee is $11.84.

To calculate the stock price today (also known as the present value of the future cash flows), we need to first project the free cash flows to equity (FCFE) for each year and discount them back to the present using the appropriate discount rate. Then, we add up the present values of all the FCFEs to get the stock price today.

First, let's calculate the FCFE for each year:

Year 1: EPS = $2.1

Retained earnings ratio = 100%

Dividends per share = $0

FCFE = EPS - dividends per share = $2.1 - $0 = $2.1

Year 2-3: EPS = $2.1

Retained earnings ratio = 100%

Dividends per share = $0

FCFE = EPS - dividends per share = $2.1 - $0 = $2.1

Year 4-5: EPS = $2.1

Retained earnings ratio = 50%

Dividends per share = $2.1 * 50% = $1.05

FCFE = EPS - dividends per share = $2.1 - $1.05 = $1.05

Year 6 onwards: EPS = $2.1

Retained earnings ratio = 25%

Dividends per share = $2.1 * 75% = $1.575

FCFE = EPS - dividends per share = $2.1 - $1.575 = $0.525

Next, let's calculate the present value of each year's FCFE:

PV of Year 1 FCFE = $2.1 / (1 + 16%)^1 = $1.81

PV of Year 2-3 FCFEs = ($2.1 / (1 + 16%)^2) + ($2.1 / (1 + 16%)^3) = $3.27

PV of Year 4-5 FCFEs = ($1.05 / (1 + 16%)^4) + ($1.05 / (1 + 16%)^5) = $1.60

PV of Year 6 onwards FCFEs = ($0.525 / (0.20 - 0.08)) / (1 + 8%)^5 = $5.16

Finally, let's add up the present values of all the FCFEs to get the stock price today:

Stock price today = PV of Year 1 FCFE + PV of Year 2-3 FCFEs + PV of Year 4-5 FCFEs + PV of Year 6 onwards FCFEs

Stock price today = $1.81 + $3.27 + $1.60 + $5.16 = $11.84

Therefore, the stock price today for Mabanee is $11.84.

learn more about stock price here

https://brainly.com/question/18366763

#SPJ11


Related Questions

what refers to actions by franchisors to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee?

Answers

The term that refers to actions by franchisers to void the contracts of franchisees in order to sell the franchise to someone else and collect an additional fee is "churning."

Churning occurs when a franchisor intentionally terminates or forces franchisees out of their contracts in order to resell the franchise to new individuals, often with the goal of generating additional fees or royalties. This practice is generally considered unethical and can lead to legal disputes between the franchisor and franchisee.. This practice is generally considered unethical and unfair to the franchisees involved. It can disrupt the business operations of existing franchisees and undermine the trust and stability of the franchising relationship.

learn more about:- Churning  here

https://brainly.com/question/329936

#SPJ11

Caldwell earned net income for 2014 of $78,750 and paid dividends of $30,000 during the year.What is AAP amortization for 2014?A) $2,200 CreditB) $2,200 DebitC) $800 DebitD) $800 Credit

Answers

To calculate the AAP amortization, we need to know the beginning balance of the AAP account, any current-year adjustments to the account, and the ending balance of the AAP account. These figures are not provided in the question.

Caldwell earned net income of $78,750 in 2014 and paid dividends of $30,000 during that year. However, the information provided is not sufficient to determine the AAP amortization for 2014. The options A) $2,200 Credit, B) $2,200 Debit, C) $800 Debit, and D) $800 Credit cannot be accurately chosen based on the given data. Additional information about the Accumulated Adjustments Account (AAP) is required to determine the correct answer.

AAP (Accumulated Adjustments Account) is an account that keeps track of a corporation's undistributed earnings and profits from previous years. The AAP balance at the end of the year is used to determine the tax consequences of any distributions made by the corporation to its shareholders.

learn more about  AAP amortization here:

https://brainly.com/question/30905365

#SPJ11

What are some positive and negative Impacts of globalization

Answers

Answer:

Globalization goal is 100% percent control of the people

Explanation:

Evidence of this is Charles Swab saying you will own nothing and be happy

Positive impacts are that globalisation can lead an increase in production for businesses in order to meet global demand. It allows companies to find lower-cost ways to produce their products. It also increases global competition, which drives prices down and creates a larger variety of choices for consumers. Lowered costs help people in both developing and already-developed countries live better on less money.

Negative impacts are:

Outsourcing services, decrease in wages, workers' rights and interdependent economy.

A simple machine has efficiency 90%.What does it mean?No machine has 100%efficiency,Why?​

Answers

Answer with explanation:

1) it means tht the machine can do it's work in a 90% in a good way

2) no machine is free from the effects of gravity, and even with wonderful lubrication the energy a machine produces is always less than the work put into it that's why 100% efficency isnt possible in machines.

Best of luck!!!

What is the hazard? Chris works for a city public works department. One hot afternoon the temperature outside reached 92 degrees. While Chris was shoveling dirt in a vacant lot, he started to feel dizzy and disoriented. He fainted due to the heat.

Answers

Answer: dehydration

Explanation:

Answer:

dehydration and heat exhaustion.

Explanation:

I hope this helps! :)

An applicants medical information receives from the medical informatuon bureau may be furnished to who?

Answers

It can be released by the proposed Insured doctor.

Randall describes his job this way.
"I visit different office buildings and service heating and cooling units that are not working properly."
Which of the Construction industry careers is Randall most likely part of?
O Landscaping
O Construction
O Maintenance/Operations
O Design/Pre-Construction
Help now please

Answers

Answer:

It is most likely c

Explanation:

Answer:

The correct answer is C.

Explanation:

Randall is most likely part of Maintenance/Operations.

Hopefully, this helps! :D

Ask your question below!

Explain the significance of profit equaling zero when calculating a break-even point

Answers

Answer:

  profit equal zero defines the break-even point

Explanation:

By definition, the break-even point is the point where profit is equal to zero. The significance is that zero profit defines the break-even point.

A company's mission statement typically addresses which of the following questions? What approach should we take to achieve sustainable competitive advantage? What objectives and level of performance do we want to achieve? Who are we? What do we do? and Why are we here? Where are we going and what should our strategy be? The difference between the concept of a company mission statement and the concept of a strategic vision is that the mission is to make a profit, whereas a strategic vision concerns how to attract customers. a mission statement deals with what to accomplish on behalf of shareholders and a strategic vision concerns what to accomplish on behalf of customers. a mission statement concerns what to do to achieve short-run objectives and a strategic vision concerns what to do to achieve long-run performance targets. a mission statement typically concerns a company's present business scope ("who we are and what we do"), whereas the principal concern of a strategic vision is with the company's future business scope (long-term direction and future product-customer-market-technology focus).

Answers

A company's mission statement serves as a concise and clear declaration of its purpose and identity. It outlines the company's core values, goals, and strategic direction. The mission statement addresses several fundamental questions that guide the company's overall direction and decision-making processes.

Who are we? The mission statement defines the company's identity and character, conveying its unique qualities and distinguishing factors.

What do we do? It clarifies the nature of the company's business and the products or services it provides.

Why are we here? The mission statement explains the company's underlying purpose, its reason for existence, and the value it aims to create for its stakeholders.

What objectives and level of performance do we want to achieve? The mission statement outlines the company's goals, aspirations, and desired outcomes. It may include specific performance targets or metrics that the company aims to achieve.

Where are we going and what should our strategy be? The mission statement provides a broad perspective on the company's future direction and strategic focus. It highlights the intended trajectory, growth plans, and strategic initiatives that the company aims to pursue.

A company's mission statement plays a vital role in defining its purpose, identity, and strategic direction. It answers questions about the company's identity, purpose, objectives, strategy, and future focus. By clearly articulating these elements, the mission statement serves as a guiding principle for the company and aligns stakeholders around a common understanding of its core values and aspirations.

To know more abot company visit:

brainly.com/question/30532251

#SPJ11

Please help. I’m struggling. 20 points !!!!

To propose the idea of creating a partnership with another business, you will need to prepare
a formal business letter to send to the owner of Great BBQ, Hank White. This proposal should
introduce the following ideas:
Forming a partnership would allow both restaurants to sell the other's product and
merchandise.
The partnership would expand both of our businesses and customer base.
.
A more detailed meeting and presentation will follow if Great BBQ is interested.
Prepare a business letter to send to Great BBQ. (8 points)

Answers

Answer:

The letter could be somewhat like this:

Dear Hank White, CEO of Great BBQ

I am John Smith, I am the CEO of a meat distributor. I specialize in prime cuts like New York Ribeye, Tenderloin, and Wagyu Beef with the best Japanese Technique.

I am sure that as business partners, we both could do better than we do right now. I have the best raw material for your restaurant business, and you have the BBQ expertise and knowledge.

I would appreciate if you considered this letter, you can call me any time if you want to discuss further, or write me an email-.

Sincerely

John Smith

The set of business activities that add value to goods and services sold to the end consumer is referred to as ______. Multiple choice question. merchandising

Answers

The set of business activities that add value to goods and services sold to the end consumer is referred to as : Merchandising

What is merchandising?

Merchandising refers to what is done to promote and sell products once the potential customer is in the store. It is the promotion of the sale of goods that can employ pricing, special offers, display and other techniques designed to influence consumers.

Merchandising consist of any practice which contributes to the sale of products to a retail consumer.

Merchandising includes but not limited to:

Auto dealershipsClothing storesSupermarkets

Therefore, the set of business activities that add value to goods and services sold to the end consumer is referred to as merchandising.

Learn more about merchandising here : https://brainly.com/question/25409653

william bennett owns a home in tampa, florida. there was a fire in his home and he and his family had to move to a hotel until his home could be fixed. what part of his homeowner's insurance policy would cover the cost of the hotel

Answers

The residence of William Bennett is in Tampa, Florida. He and his family had to relocate to a hotel while his house was being fixed after a fire broke out in it. additional living expenses part of his homeowner's insurance policy would cover the cost of the hotel.

Most homeowner's or renter's insurance policies offer ALE coverage. This kind of insurance pays for costs like food and hotel accommodations while a primary residence is being repaired.

Typically, additional living expense coverage covers any additional living costs you may incur as a result of being evicted from your home. Additional expenses for transportation, short-term lodging, pet boarding, storage unit rental, laundry, and meals may be included.

The four main coverage categories in a standard policy are liability, personal property, other structures, and dwelling.

Read more about home in tampa florida at

https://brainly.com/question/14501654

#SPJ4

please help me quick :(​ (sorry meant to put chem not business)

please help me quick :( (sorry meant to put chem not business)

Answers

Air is a mixture the rest aren’t

the standard cost for ______ manufacturing overhead is computed the same way as the standard cost for direct labor.

Answers

The  standard cost for variable manufacturing overhead is computed the

same way as the standard cost for direct labor.

This is true as the both of them measure the degree to which a person works in an organization.This is usually measured by dividing the expected

manufacturing variable with the amount of time taken.

This also tells the amount of wages which an individual will receive usually at the end of the week or month.

Read more on https://brainly.com/question/25279292

What are the four basic factors that effect workplace safety?

Answers

Answer Tasks, workload and work patterns. Working environment and workplace design. Workplace culture and communication.

Is computer assembly a good job for a teenager?

Answers

Yes, if the teen is educated on computers and the assembly of them.
No, if they are not educated about computers

Explanation:

Jobs help kids develop a sense of responsibility. Jobs help kids develop a greatest sense os self. To develop a teen under the age of 16 it costs more in insurance and there is extral laws as well so most businesses just don't do it. A best thing you can do is talk to your local shop owners. Go to the shop (during a non busy time) and ask if the owner has some time to walk to you and if not when would be a good time.

bartering is a technique used by advertisers to recapture shoppers who abandoned a web site without making a purchase.
a. true
b. false

Answers

The statement "Bartering is a technique used by advertisers to recapture shoppers who abandoned a web site without making a purchase." is false.

Give a brief account on bartering.

Bartering is the process of exchanging products or services between two or more parties without using cash or another form of payment, like a credit card. Bartering basically entails one party offering a good or service in exchange for another party offering a similar good or service. A carpenter building a fence for a farmer is an easy illustration of a barter deal. Instead of giving the builder $1,000 in cash for labor and supplies, the farmer could give the carpenter $1,000 worth of crops or groceries as payment.

The basis of bartering is a straightforward idea: Two people bargain to discover the relative value of their goods and services, then offer them to one another in an equal exchange. It predates even the creation of real cash, making it the oldest form of trade. While the current senior generation bartered with someone they knew for the few goods they had on hand (such as produce and livestock) or services they could personally provide (such as carpentry and tailoring), most Americans today have access to a nearly limitless source of potential barter partners through the internet.

To know more about, bartering, visit :

https://brainly.com/question/14903216

#SPJ4

Do not recall password and i am not receiving password reset email. i wish to cancel my subscription and not be charged now that i am done with school.

Answers

In case you did no longer request to acquire those password reset emails, the high-quality route of action is to disregard them.

With software being utilized in so many regions of lifestyles, it is not unusual now to acquire a password reset notification without inquiring for it.

That may be due to a simple typo or someone genuinely trying to advantage get the right of entry to a person else's account. it is able to be puzzling—even alarming—to acquire these emails.

If a person maintains trying to request a password reset, your e-mail address can be fetched through malware, phishing emails, or attacking internet sites.

Run anti-virus/anti-malware scans in your laptop. make certain not to submit your electronic mail cope with publicly or subscribe to suspicious internet pages.

Learn more about password here: https://brainly.com/question/15016664

#SPJ4

_______ is the PMBOK process that identifies those project needs that can be met by acquiring products and services from outside suppliers, determines what to purchase or acquire, and finalizes when and how to do so. Group of answer choices Define supply chain. Plan procurement management. Schedule procurements. Negotiate contracts

Answers

The correct option is B. Plan procurement management is the PMBOK process that identifies those project needs that can be met by acquiring products and services from outside suppliers, determines what to purchase or acquire, and finalizes when and how to do so.

What is procurement in PMBOK?

Project Procurement Management, according to the PMBOK® Guide - Sixth Edition, encompasses the procedures required to get the goods, services, or outcomes required from parties outside the project team.

The method of determining and logging the project requirements that can or must be satisfied by obtaining goods, services, or outcomes from outside the project organization.

Learn more about Plan procurement management here:

https://brainly.com/question/26101126

#SPJ1

along the aggregate supply curve group of answer choices the horizontal part represents a situation where the economy is operating above full employment levels. the horizontal section of the aggregate supply curve represents the limit of production. inflation would be a primary concern along the horizontal part of the aggregate supply curve. the middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

Answers

The correct answer is: (D) The middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

The aggregate supply curve shows the total amount of goods and services that firms are willing to supply at different price levels. The middle, upward-sloping part of the curve represents a situation where the economy is operating below its full employment level, but with an increasing level of output.

As output expands, resources become relatively scarce, which leads to increasing costs and prices. This section of the curve is also known as the "sticky" or "sluggish" region, where it takes time for firms to adjust their prices to changes in the demand for their goods and services.

Learn more about the aggregate supply curve

https://brainly.com/question/14020407

#SPJ4

Full Question: along the aggregate supply curve group of answer choices

the horizontal part represents a situation where the economy is operating above full employment levels.the horizontal section of the aggregate supply curve represents the limit of production. inflation would be a primary concern along the horizontal part of the aggregate supply curve. the middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

When a site is unsafe, it means a. Your personal information may be used in ways you do not want c. Permission to use that site at school is always allowed b. That site is okay to visit often d. All of the above Please select the best answer from the choices provided A B C D

Answers

Answer:A, Your personal information may be used in ways you do not want

Explanation:

If it is a unsafe site than there for your personal information can go places you do not want them to.

When a site is unsafe, it means your personal information may be used in ways you do not want. Thus, option 'A' is the correct option.

What does it mean when a website is unsafe?

External connections to websites with phishing, malware, or unwanted software are known as unsafe domains. Phishing is when a website imitates another one in an effort to fool visitors into divulging personal or financial information. When you visit an insecure website, you run the risk of having your personal information compromised and/or having malicious malware installed on your system.

Additionally, you can fall prey to a phishing attack, or someone else might watch your activity or use your resources for their own gain. If the content you're seeking to view is harmful or misleading, a warning will appear. These websites are frequently referred to as phishing or virus sites. If you clicked on a phishing link, the first thing you should do is immediately unplug your device from the internet.

Learn more about the unsafe website, here:

https://brainly.com/question/27871014

#SPJ5

How can Joseph’s increased debt affect the rest of his life?

Answers

Genesis's interest in Joseph's management of the food crisis lies more in its effect on the family of Israel than in developing principles for effective.

Can someone help me with this question ?

Can someone help me with this question ?

Answers

Must be flexible and assess opportunities

1.What is MONEY?
2.did MONEY help you?
pls ans im back​

Answers

1. Money is a very valuable thing that helps you live. You can get money by getting a job, but there are lots of other ways to get money.

2. money helps with you being able to afford things. Money can get you a house, a tv, or even a phone.

The elements of products that may be changed to meet customer needs are features, usage, and _______. a. qualityb.promotionc.protectiond.production

Answers

The elements of products that may be changed to meet customer needs are features, usage, and C. protection. It is because the market taste is change in the periodic time based on their necessary.

In the term of economic market and also business, The changes in consumer taste generally can be defined as an increase in e-commerce as well as more demand for sustainable and inclusive products. The change in the economic market is the impact of the emergence of Gen-Z who cares more about the environment and social issues, businesses with a vision aligned with them will benefit greatly. The change in the watch market is significant because the market tastes will continue to change, whether by changing in the features, usage, or also protection.

Here you can learn more about change in market taste https://brainly.com/question/28633615

#SPJ4

A construction crew has been tasked with removing the foundation of an old building, as well as the old
electrical wiring and gas lines buried underneath the site where a new building will be built. What process are
they engaging in?
O excavation
O site investigation
demolition
O grading
Noyt
Submit

Answers

Answer:

excavation

Explanation:

" a construction crew has been tasked with removing "

w How does a training change a traditional profession into a modem profession? Discuss in the class.​

Answers

Answer:

when one gains training he/she likes to do some works which gains much profit .he /she leaves the works which they worked for first time.

Which sentence best paraphrases the passage?

Immigrants were examined for physical and mental illnesses.
A doctor’s examination was a quick process.
The doctors were from the United States Health Service.
One doctor looked for physical and mental abnormalities.

Answers

Answer:

A). Immigrants were examined for physical and mental illnesses

Explanation:

Answer:

a

Explanation:

A firm has announced earnings of R1.5 million for last year, and the firm has 500 000 shares in issue, trading at R9 per share. The firm has a plowback ratio of 40% and historical ROE of 25%. If the required rate of return is 12%, what is the firm's leading PE ratio?
a. 27.0
b. 25.5
c. 37.5 
d. 30.0

Answers

The firm's leading PE ratio is 3. Return on Investment Pricing or Ratio to Earnings The multiple is the proportion of a stock's share price to its earnings per share (EPS).

Given

Price = R9

Earning = R1.5 million

Number of shares = 500,000

Required rate of return = 12%

plow back ratio = 40%

Required to Calculate PE ratio =?

Calculate the earnings per share (EPS):

EPS = Earnings / Number of shares

EPS = R1.5 million / 500,000 shares

EPS = R3 per share

Calculate the leading P/E ratio:

P/E ratio = Price per share / Earnings per share

P/E ratio = R9 per share / R3 per share

P/E ratio = 3

Therefore, the firm's leading P/E ratio is 3.

Learn more about the P/E ratio here:

brainly.com/question/30762887

#SPJ4

When the economy is in an expansion, normally the demand for bonds bonds and the interest rate A. increases; increases; rises B. decreases; decreases; falls C. increases; decreases; falls D. decrease; increase

Answers

When the economy is in an expansion, normally the demand for bonds and the interest rate rises (option A).

An economy in an expansion is a period of economic growth characterized by rising consumer demand and economic production. During expansionary periods, people are more optimistic about the future, and they are willing to spend and invest money. As a result, interest rates and bond yields are rising.The increase in demand for goods and services during the expansion leads to a higher level of inflation, which makes investors more hesitant to lend money. Investors will need higher interest rates to make up for the lost purchasing power that comes with inflation. As a result, bond prices and interest rates rise.

An increase in interest rates also makes borrowing money more expensive, which can dampen economic growth. When borrowing costs rise, consumers and businesses will be less likely to take out loans, resulting in less spending and economic activity. The correct option is A.

To know more about economy:

https://brainly.com/question/30131108

#SPJ11

Other Questions
Help!!!!! Very urgent!!!!!! Which statement about DNA replication is FALSE?A). Because the two strands of parental DNA run in opposite directions, the new strands must be made in different ways.B). The lagging strand is made of a series of pieces that must be joined together to make a continuous strand.C). DNA polymerase builds a new strand by adding DNA nucleotides one at a time.D). DNA ligase adds nucleotides to the lagging strand.E). The two strands of parental DNA are separated during DNA replication. Is Animal Farm an allusion or allegory? The answer to this question is D as it says in the answer sheet of the question paper but how? A spring with spring constant 120 N/m and unstretched length 0.4 m has one end anchored to a wall and a force F is applied to the other end. Required:a. If the force F does 250 J of work in stretching out the spring, what is its final length?b. If the force F does 250 J of work in stretching out the spring, what is the magnitude of F at maximum elongation? Find mA. Round to the nearest tenth.a. 36.9b. 50.1c. 51.3d. 38.7 3.3 Sam drove from his house to College. When he stopped at College he saw on the instrument panelof his car that he covered 26.5 km. consider the figure below and answer the following questions (a) what is the distance converted sam 24-year-old man undergoes a routine medical check-up to become a volunteer in the er. ppd skin test shows an induration diameter of 9 mm Is real the maximum value of 3x 9x 17 3x 9x 7? Use a numerical example to illustrate why the principle of triangular arbitrage will ensure that there are no discrepancies in exchange rates across currencies. 2. Use a numerical example to illustrate how changes in exchange rate have an impact on different components of real GDP, and how that influences real GDP. 3. How does the definition of capital account differ in the US versus the rest of the world? 4. Why is a current account deficit not necessarily a bad thing? 5. Why is national savings equal to investment in a closed economy? 6. Explain the short-run model of exchange rates with appropriate graphs. 7. Explain the two versions of the interest parity condition. 8. What factors determine the demand for assets? 9. List 5 currency pairs. Look up the interest rate movement and exchange rates of the currencies over the last 5 years. That is, plot exchange rate between the currencies, and the benchmark interest rate in each currency over the last 5 years. Are the exchange rate movements of the currency pairs consistent with the predictions of the interest parity condition in your data set? Why, or why not? 10. Suppose an American company has to make a payment of 1 billion in a year's time. Suppose the current exchange rate is $1.011. Further suppose that the euro is expected to appreciate to $1.101. Suppose that the firm buys a call option with a strike price of $1.101. The premium for this contract is $50 million. At what exchange rate will the contract become profitable for the American firm? Show all work. Draw the payoff diagram for the buyer and the seller of the option contract. 1 in 3 ft1 in 8.25 ftAbove are two different models of the same rectangle. If the width of the model on the left is 11 in, what is the width of the model onthe right? help would be greatly appreciated :) once a week you babysit your neighbor's toddler after school, usually going to a local playground. You notice that each swing on the swing set takes about the same amount of time, about 2.2 seconds. Use the pendulum formula below to find out how long the swing is. Round your answer to the tenths place. what are exponents?????? help me to give answer.... In Python, what is the result of the following operation '1'+'2'. '12'. Which of the following represents the normal sequence in which the indicated budgets are prepared? A. Direct Materials, Cash, Sales B. Production, Cash, Income Statement C. Sales, Balance Sheet, Direct Labor D. Production, Manufacturing Overhead, Sales why should you have a good attitude School. 3 pages to eliminate an ad shortfall of $120 billion when the economy has an mpc of 0.75, the government should decrease taxes by cross-cultural studies have found similar gender stereotypes across cultures. which of the following is a common gender stereotype for women? group of answer choices intelligence competence skillfulness soft-heartedness