The writer is very fast, professional and responded to the review request fast also. Thank you.
Please answer the following questions (show calculations where necessary) and submit for grading:
1. In what circumstances would you choose to use a dividend discount model rather than a free cash flow model to value a firm? Why?
2. Johnson & Johnson has a ROE of 19% and a plowback ratio of 50%. If the coming year’s earnings are expected to be $2 per share, at what price will the stock sell? The market capitalization rate is 12%.
What price do you expect Johnson & Johnson shares to sell for in three years?
3. Choose two firms of interest from fiance.yahoo.com, finance.google.com, or money.msn.com and download their financial statements. For each firm:
a. Write the ROE, the number of shares outstanding, the dividends per share, and the net income.
b. Compute the sustainable growth rate (g = b * ROE), where b equals the plowback ratio.
c. Calculate the total amount of dividends paid (dividends * number of shares outstanding), the dividend payout ratio (total dividends paid/net income), and the plowback ratio (1 – dividend payout ratio).
d. What does this information reveal about the ROE for the firms you selected?
Be sure to include the link for the financial statements that you select.
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more