Equity pricing assignment | Business & Finance homework help

 & Institutions

Don't use plagiarized sources. Get Your Custom Essay on
Equity pricing assignment | Business & Finance homework help
Just from $13/Page
Order Essay

Equity Pricing Homework Exercise


The stock of company XYZ is currently price at $80 per share.  It’s earnings this year (T=0) are $4.00 per share.  It has paid out a dividend equal to 40% of its earnings for the past several years.  It’s Return on Equity (ROE) has been 18%. 


1.       What is the company’s current Dividend Yield?

4.0 * .40 = 1.60 dividend per share. 1.60/80 =

Dividend Yield = Annual Dividend per Share / Market Price of the Stock


Dividend Discount Model

The market expects that companies similar to XYZ will display a rate of return of 13% per year


2.       What is the company’s expected Growth Rate for Earnings & Dividends?


3.      What dividends will the company pay this year (D0) and be expected to pay next year (D1)?


4.      What is the estimated value of the stock today (T=0) using the Dividend Discount Model?


5.      What is the estimated value of the stock 1 year from today (T=1)?


Capital Asset Pricing Model (CAPM)

The current risk free interest rate is 2%

The market as a whole is expected to realize a return of 15% this year

XYZ’s stock has historically displayed a Beta of 0.9



6.      Using the CAPM, what is the required rate of return that investors would demand of XYZ this year?


7.      If the required rate of return as calculated in (5) were used in the dividend discount model, what would be an appropriate value for XYZ’s stock today (T=0)?


Market Multiples

8.      If the Price / Earnings ratio for XYZ during similar stages of the business cycle had ranged from 16x to 22x, what would be the range of values for its stock?



Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our Guarantees

At 111papers.com, we value all our customers, and for that, always strive to ensure that we deliver the best top-quality content that we can. All the processes, from writing, formatting, editing, and submission is 100% original and detail-oriented. With us, you are, therefore, always guaranteed quality work by certified and experienced writing professionals. We take pride in the university homework help services that we provide our customers.

Money-Back Guarantee

As the best homework help service in the world, 111 Papers ensures that all customers are completely satisfied with the finished product before disbursing payment. You are not obligated to pay for the final product if you aren’t 100% satisfied with the paper. We also provide a money-back guarantee if you don’t feel that your paper was written to your satisfaction. This guarantee is totally transparent and follows all the terms and conditions set by the company.

Read more

Zero-Plagiarism Guarantee

All products that we deliver are guaranteed to be 100% original. We check for unoriginality on all orders delivered by our writers using the most advanced anti-plagiarism programs in the market. We, therefore, guarantee that all products that we submit to you are 100% original. We have a zero-tolerance policy for copied content. Thanks to our strict no plagiarized work rule, you can submit your homework to your professor without worrying.

Read more

Free-Revision Policy

TThis is one of the most cherished courtesy services that we provide to help ensure that our customers are completely satisfied with our finished products. Delivering the best final product to our customers takes multiple inputs. 111papers.com prides itself on delivering the best university homework help services in the writing industry. And, in part, our free revision policy is how we do it. What’s more, all our revisions are 100% free without any strings attached.

Read more

Privacy Policy

Client privacy is important to use. We know and understand just how important customers value their privacy and always want to safeguard their personal information. Thus, all the information that you share with us will always remain in safe custody. We will never disclose your personal information to any third party or sell your details to anyone. 111 Papers uses the most sophisticated, top-of-the-line security programs to ensure that our customers’ information is safe and secured.

Read more

Fair-Cooperation Guarantee

Placing your order with us means that you agree with the homework help service we provide. We, in turn, will endear to ensure that we do everything we can to deliver the most comprehensive finished product as per your requirements. We will also count on your cooperation to help us deliver on this mandate. Yes, we also need you to ensure that you have the highest-quality paper.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages