Question: Cooperton Mining Just announced it will cut is dividend from $4.53 to $2.93 per share and use the exdra funds to expand. Prior to the
Cooperton Mining Just announced it will cut is dividend from $4.53 to $2.93 per share and use the exdra funds to expand. Prior to the announcement , Cooperton's dividends were expected to grow at a 3.1% rate, and its share price was $49,68. With the new expansion, Cooperton's dividends are expected to grow at a 5.1% rate What share price would you expect after the announcement? (Assume Cooperton's risk is unchanged by the new expansion.) Is the expansion a positive NPV investment? What share price would you expect after the announcement? The equity cost of capital is % (Round to two decimal places) The new share price will be $ (Round to the nearest cent) Is the expansion a positive NPV investment? (Select from the drop-down menu.) In this case, cutting the dividend to expand a positive NPV investment
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