Question: Please answer A,B and C. 6. (This question is not cumulative) (a) NoGrowth Corp. currently pays a dividend of $2.00 per year, and it will
Please answer A,B and C.
6. (This question is not cumulative) (a) NoGrowth Corp. currently pays a dividend of $2.00 per year, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the required rate of return on the stock is 15% ? (b) Summit Systems just paid a dividend of $1.5. If you expect Summit's dividend to grow by 6% per year, what is its price per share if the required rate of return for Summit is 11% ? What will the price be in five years? (c) Excel Inc. pays a constant $6.5 dividend on its stock. The company will maintain this dividend for the next thirteen years and will then cease paying dividend forever. If the required rate of return on this stock is 10 percent, what is the current share price
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