Church Inc. is presently enjoying relatively high growth because

Church Inc. is presently enjoying relatively high growth because


Asked by 5 years ago
393k points
  1. Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The companys last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

a. $26.77

b. $27.89

c. $29.05

d. $30.21

e. $31.42

Church Inc
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2 Answers

Answered by 5 years ago
407.5k points

Oh Snap! This Answer is Locked

 Church Inc. is presently enjoying relatively high growth because

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Excerpt from file: 4. Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero,

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Answered by 2 years ago
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Oh Snap! This Answer is Locked

 Church Inc. is presently enjoying relatively high growth because

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Excerpt from file: A. Pretax financial income Permanent difference Non deductable expense Total Taxable income Temporary difference Tax rate Income tax payable Income tax expense (45,50063,000) Deferred tax liability (130,000*35%) Income tax payable(180,000*35%) 2007 280,000 2008 320,000 2009 350,000 30,000 310,000

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Asked: 5 years ago

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