Consider a firm that produced a Dividend of $5,000 this last year and the dividend payout ratio
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Question:
Consider a firm that produced a Dividend of $5,000 this last year and the dividend payout ratio is expected to increase by 5% per year forever.
Consider that this firm has a 13% cost of equity capital. This firm has 100,000 shares of common stock outstanding.
- How much is the Entire Firm's equity (market capitalization) worth?
- What is the best estimate for Price Per Share of common stock?
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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