What is new value of po
Course:- Finance Basics
Reference No.:- EM13298343

Assignment Help
Assignment Help >> Finance Basics

A company will pay a dividend of $1.50 per share in the next 12 months (D1). The required rate of return (Ke) is 10% and the constant growth rate is 5%.

a. compute Po?

(for b,c,d all variables remain the same except the specific one changed. each question is independent of others)

b. assume Ke, the required rate of return goes up to 12%, what will be the new value of Po?

c. assume the growth rate (g) goes up to 7%, what is new value of Po?

d. assume D1 is $2, what is new value of Po?


Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Describe how B&B will reflect the changes in the land's value in each of its annual financial statements. Assume that the asset was a building with a ten-year remaining useful
Explore the cost of capital and the relationship that debt has to the weighted average cost of capital. Address the question, "if debt capital is the lower cost source of ca
Kathy owns a large retail electrical store that sells light fixtures, lamps, and electrical equipment. The firm is not insured for employee theft. A risk management consulta
It is clear that they currently do not know if they have enough personnel to meet the workload from the extra demand. From past events it has been shown they do not have the
A riskless zero-coupon (no intermediate/periodic coupon payments) bond that will pay $1,000 in 10 years is selling today for $350. What implied rate of return does the bond
Utilizing the percent of offers technique, set up the star forma benefit and misfortune represent year 3. Expect that the deals will be 26,000 in year 3. In the event that pro
Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of 9.73 and a P/E multiple of 18.4. What share price would you estimate for KCP using each of these multi
You are the nursing administrator for a medical group that expects a severe outbreak of the flu this winter.  You hire additional staff to treat the patients and administer