Homework answers / question archive / 1  A company has a book value of equity of $248 million, an expected ROCE of 15% and a cost of equity capital of 14

1  A company has a book value of equity of $248 million, an expected ROCE of 15% and a cost of equity capital of 14

Finance

Share With

1 

A company has a book value of equity of $248 million, an expected ROCE of 15% and a cost of equity capital of 14.1%. What is the company's market value of equity if itsdividend payout ratio is 80% and its long-run growth rate in residual earnings is 3% p.a.?

2 

A company's book value per share is $6.47. What is the company's intrinsic price-to-book ratio (to two decimal places) if the present value of the next five year’s residual earnings is $1.22 per share and the present value of residual earnings beyond year five is $5.57 per share?

3 

Question 5 Discuss the role of auditors and offer a balance argument for and against the role of auditors in underpinning the stewardship process between a company's directors and its shareholders.