Compute K e and K n under the following circumstances: D 1 = $4.60, P 0 = $60, g

Question

Compute Ke and Kn under the following circumstances:

D1 = $4.60, P0 = $60, g = 6%, F = $3.00. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

D1 = $.25, P0 = $20, g = 9%, F = $1.50. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

E1 (earnings at the end of period one) = $6, payout ratio equals 30 percent, P0 = $24, g = 4.5%, F = $1.60. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

D0 (dividend at the beginning of the first period) = $3, growth rate for dividends and earnings (g) = 8%, P0 = $50, F = $3. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Compute Ke and Kn under the following circumstances:

Explanation / Answer

a.

Ke=(4.60/60)+6%=13.67%

Kn=(4.60/(60-3))+6%=14.07%

b.

Ke=(.25/20)+9%=10.25%

Kn=(.25/(20-1.5))+9%=10.35%

c.

Ke=((30*6%)/24)+4.5%=12.00%

Kn=((30*6%)/(24-1.60))+4.5%=12.54%

d.

Ke=((3*1.08)/50)+8%=14.48%

Kn=((3*1.08)/(50-3))+8%=14.89%

the above are the answers

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