Calculate the share price, Accounting Basics

Cooperton Mining just announced it will cut its dividend from $4 to $2.50 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3% rate, and its share price was $50. With the new expansion, Cooperton's dividends are expected to grow at a 5% rate. What share price would you expect after the announcement? (Assume Cooperton's risk is unchanged by the new expansion.) Is the expansion a positive NPV investment?   

Posted Date: 3/23/2013 5:22:54 AM | Location : United States







Related Discussions:- Calculate the share price, Assignment Help, Ask Question on Calculate the share price, Get Answer, Expert's Help, Calculate the share price Discussions

Write discussion on Calculate the share price
Your posts are moderated
Related Questions
The Bayside Company uses the LIFO cost flow method to value inventory. In the current year, profit at Bayside is running unusually high. The corporate tax rate is also high this ye

what is meaning by parallel accounts

There are over 5,000 banks in the United States-more than 10 times the number per person than in other industrialized countries. A recent study suggests that the long-run average c

Prepare the Journal Entries Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the tr

Management: Organizations may not or may exist for the sole reason of profit. Though, information requires of the managers of both types of organizations are approximately the sam

Q. Measurement in financial statements? In December 1984 the FASB issued Statement of Financial Accounting Concepts No. 5 The Recognition and Measurement in Financial Statement

Your client, Hope, of Hope's Country Corner, is curious about two events will influence both taxable and financial income. The first event involves the purchase of pottery-making e

The Olympic Company has an accounts receivable balance at December 31, 2010 of $159,548.00.  The existing balance in the Allowance for Uncollectible Accounts was a credit of $2,563


The total revenue of the month of June amounted to $6,500; total expenses amounted to $3,500; and withdrawals amounted to $600. The net income for the month amounted to $6,000. $