You are a financial analyst at Bank of America and you havecollected following information for Lotus Tech Company. The companyhas beta of 1.5 and a ROE of 20%. The dividend payout ratio is 50%.Last twelve month earnings were $4 per share. The annual dividendwas just paid. The consensus estimate of the coming year’s marketreturn is 11%, and T-bills currently offer a 8% return. (keep twodecimal places please.)
a. What is the required rate of return of the stock? (inputformat: 15.32%)
b. What is the growth rate of the stock? (input format:15.32%)
c. What is the intrinsic value of the stock? (input format:$15.32)
d. What is PVGO of the stock? (input format: $15.32)
e. Suppose your research convinces you that company willannounce momentarily that it will immediately change its dividendpayout ratio to 75%. Find the intrinsic value of the stock. (inputformat: $15.32)
You are a financial analyst at Bank of America and you have collected following information for Lotus Tech Company. The
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