Solution-Define how many shares will he have to sell in

Define how many shares will he have to sell in first year

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Reference no: EM131730406

Nandel is a retired short-order cook living on a fixed income in the state of Utopia where all financial markets are perfectly efficient. Nandal has 20,000 shares of the Sugarcooky Corp., which pays an annualized dividend of $1.00 per share. Sugarcooky sells at a P/E of 10, has maintained a payout ratio of 50% for many years, and has not grown in some time. Management has recently announced that it will reduce Sugarcooky's payout ratio to 25% but expects earnings to grow at 5% from now on.

If Nandal keeps his money in Sugarcooky but needs to maintain his current income, how many shares will he have to sell in the first year?

Reference no: EM131730406

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Define how many shares will he have to sell in first year : If Nandal keeps his money in Sugarcooky but needs to maintain his current income, how many shares will he have to sell in the first year

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Define how many shares will he have to sell in first year

Reference no: EM131730406

Reference no: EM131730406

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