Share price, Finance Basics


A firm just announced that it will cut its dividend from 4.9 dollars per share to 2.1 dollars per share at the end of this year. The dividend was expected to grow 2.7% every year before the announcement but it is now expected to grow 5.6% every year. The share price before the announcement was 70 dollars. What is its new share price after the announcement assuming that the additional investment does not change the firm''s risk? Provide two digits after the decimal point.
Answer
Posted Date: 10/30/2012 1:50:32 AM | Location : United States







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

Write discussion on Share price
Your posts are moderated
Related Questions
Price Earnings Ratio Valuation P/E ratio is traditionally employed for valuation of shares however it is an important ratio in the valuation of business. The P/E ratio is the

Cost of Retaining Finance This will contains dividends for share capital and interest for debt finance or can say tax deducted or like effective cost of debt.  Though, when co

Shareholders and Management There is near separation of ownership and management of the firm. Landlord employs professionals as managers who such have technical skills. Manage

Current cost of a bond: You know that the after-tax cost of debt capital for Bubbles Champagne is 7 percent. If the firm has only one issue of five-year maturity bonds outstanding,

Limitations of Credit Cards - Source of Finance Limitations of Credit Cards as a Source of Finance are as follow: i) These cards lead to overspending on the part of the hol

Define the term - Right Issues If an existing company intends to raise extra funds, it can do so by borrowing or b issuing new shares. One of the most general methods for a

Question 1 a) What are the main characteristics of an Efficient Tax system? b) What are the instruments of Public Finance and explain their efficiency. c) Explain what

Explain the method of Offer of Sale Method of offer of sale consists in outright sale of securities through intermediary of issue houses or share brokers. In other words, sh

DIY Inc. plans to raise $200,000 with a right offering. The current stock price is $100 and there are 80,000 shares outstanding.  a. If DIY sets the subscription price to be $80

Zoeckler Mowing & Landscaping''s year-end 2012 balance sheet lists current assets of $436,500, fixed assets of $551,500, current liabilities of $417,900, and long-term debt of $317