Question: Paragraph Question 3: Note that this question has 10 parts, 5 short math questions, 4 short answer questions, and I question that requires both a
Paragraph Question 3: Note that this question has 10 parts, 5 short math questions, 4 short answer questions, and I question that requires both a math answer and a short written answer explaining your reasoning. The information needed to answer these questions will be repeated at the top of each page for your convenience. CaixaBank, Corp, needs to purchase new plastic moulding machines to meet the demand for its product. The cost of the equipment is $1.424,000. It is estimated that the firm will increase after tax cash flow (ATC) by $266941 annually for the next 6 years. The firm is financed with 40% debt and 60% equity, both based on current market values, though the firm has announced that it wants to quickly change its debt to equity ratio to 1.5. The firm's beta is 1.31, the risk free rate is 2.65% and the expected market return is 5.99% CaixaBank, Corp.'s semi-annual bonds have 12.10% coupons, 16 years to maturity, and a quoted price of 104.472. Assume the firm's tax rate is 34%. The firm's last 5 dividends (the last in the list is Do) are 1.23, 1.25, 1.42, 1.90, and 1.98. Its current market price is $1470.67 Question 3. Math A: What is CaixaBank Corp.'s historic rate of dividend growth based on the last 5 dividends? (5 Question 3 Math B: What is the firm's required return on equity based on the DDM model
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