Question: Answer follow image: (a) (b) SUMIT POWER is expected to pay a dividend of Tk 2.20 per share forever - no growth or decline. DORREN

Answer follow image:

Answer follow image: (a) (b) SUMIT POWER is expected to pay a

(a) (b) SUMIT POWER is expected to pay a dividend of Tk 2.20 per share forever - no growth or decline. DORREN POWER will pay a dividend of Tk 1.40 next year. Dividends are expected to grow at 3% per year forever. SAIF POWER is recovering from several years of losses, during which its dividend was cut to Tk 0.50 per year. The now-profitable company is expected to increase dividends by Tk 0.50 per year for four years. Thereafter dividends are not expected to grow or decline. (c) The cost of equity is 9.5%. How much is each stock worth today (ex-dividend)

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