Problem 8-34, Air conditioners
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Calculate the equivalent annual cost of the Econo-Cool and the Luxury Air, and determine which model is more cost-effective.
Calculate the equivalent annual cost of the Econo-Cool and the Luxury Air, and determine which model is more cost-effective.
Determine the years to wait to maximize the NPV, and determine the NPV at that optimal year, its dollar equivalent today.
Calculate the equivalent annual cost of the replacement decision, and decide whether to replace it now or not.
Determine if you should replace an old forklift with a new one that will last much longer. Determine the EAC of the new machine and the equivalent cost of owning and operating the forklift. Should the forklift be replaced?
Given a company’s recently paid dividend per share, a constant dividend growth rate, and the required return by investors, calculate the current price of the company’s stock. Determine the stock price in a few years and in many years from now.
Given a company’s next dividend payment per share, a constant dividend growth rate, and the current stock price, calculate the required return. Determine the dividend yield and the expected capital gains yield for the company.
Given a company’s dividend per share for the next year, a constant annual dividend growth rate, and the required return on investment, calculate the current price an investor should pay for the company’s stock.
Determine the required return on the stock of Caccamise Co., given the company’s constant dividend growth rate and dividend yield. Express your answer as a percentage rounded to two decimal places.
Given a company’s current stock price, required return, and a policy to maintain a constant growth rate in dividends, determine the current dividend per share when the total return on the stock is evenly divided between a capital gains yield and a dividend yield. Find the current dividend per share.
Determine the current share price for a company’s stock given the constant dividend payment, the duration of the dividend payments, and the required return on the stock. The assumption in the problem is that the dividends are ceased after a certain number of years. Round your answer to two decimal places.