question archive 1) Universal Forest's current stock price is $154
1) Universal Forest's current stock price is $154
Subject:FinancePrice: Bought3
1) Universal Forest's current stock price is $154.00 and it is likely
to pay a $5.23 dividend next year. Since analysts estimate Universal Forest will have a 13.0 percent growth rate, what is its required return?
2) Choose the most accurate statement: 'An increase in total assets ...' : A) means that net working capital is also increasing. B) requires an investment in fixed assets. C) means that stockholders' equity must also increase. D) must be offset by an equal increase in liabilities and stockholders' equity. E) can only occur when a firm has positive net income.
3) F has 300,000 shares outstanding with a market value of $25 each and no debt. The β of F's equity is 0.9, the risk-free rate is 4% and the expected return of the market portfolio is 9%. F considers the following operation
Operation: F invests $1,500,000 in a project that generates $200,000 per year after tax (perpetuity). This project has the same systematic risk as F's existing assets. The investment cost is financed by issuing debt for the same amount ($1,500,000). If you hold one F stock, how much value is created/destroyed for you in this operation?
