# Fill in the missing items in the following table

01 / 10 / 2021 Assignment

This paper circulates around the core theme of Fill in the missing items in the following table together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

You are considering an investment in the
shares of Kirk’s Information Inc. The company is still in its growth phase, so
it won’t pay dividends for the next few years. Kirk’s accountant has determined
that their first year’s earnings per share (EPS) is expected to be \$20. The
company expects a return on equity (ROE) of 25% in each of the next 5 years but
in the sixth year they expect to earn 20%. In the seventh year and forever into
the future, they expect to earn 15%. Also, at the end of the sixth year and
every year after that, they expect to pay dividends at a rate of 70% of
earnings, retaining the other 30% in the company. Kirk’s uses a discount rate
of 15%.

A. Fill in the missing items in the
following table:

 Year EPS ROE Expected Dividend (end of year) Present Value Of Dividend (at time 0) 0 n/a n/a n/a n/a 1 20 25% 0 0 2 25 = 1.25 x 20 25% 0 0 3 ? 25% 0 0 4 ? 25% 0 0 5 ? 25% 0 0 6 ? 20% ? ? 7 ? 15% ? ? 8 ? 15% ? ?

B. What would the dividend be in year 8?

C. Calculate
the value of all future dividends at the beginning of year 8. (Hint: P7
depends on D8.)

D. What
is the present value of P7 at the beginning of year 1?

E. What is the value of the company now, at time
0?

International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

Company # 11483120

## Benefits You Get

• Free Turnitin Report
• Unlimited Revisions
• Installment Plan
• Plagiarism Free Guarantee
• 100% Confidentiality
• 100% Satisfaction Guarantee
• 100% Money-Back Guarantee
• On-Time Delivery Guarantee

+44 7340 9595 39
+44 20 3239 6980
[email protected]
AKOSZTEC “International House, 12 Constance Street, London, United Kingdom, E16 2DQ”

Hire Researcher
Rated 4.7/5 based on 8956 Reviews

## Supporting Pages

FLAT 50% OFF ON EVERY ORDER. Use "FLAT50" as your promo code during checkout