Question: A1 X V fx A B C D E F G H UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT Chapter 7 -- Equity Financing PROBLEM 4 Assume the

A1 X V fx A B C D E F G H UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT Chapter 7 -- Equity Financing PROBLEM 4 Assume the risk-free rate is 6 percent and the market risk premium is 6 percent. The stock of 8 Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (DO) was $2 per share. 9 a. What would PCN's stock value be if the dividend was expected to grow at a constant -5 percent? 10 0 percent? 5 percent? 10 percent? 11 b. What would be the stock value if the growth rate is 10 percent, but PCN's beta falls to 1.0? 0.5? 12 13 ANSWER 14 15 16

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