The dividend policy of Scorpio Inc. has been recently changed to payout 40 percent of its...
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The dividend policy of Scorpio Inc. has been recently changed to payout 40 percent of its earnings to shareholders. The company has just paid dividends of $3 per share. a. Calculate the growth rate of dividends if the return on equity is 12 percent. b. Calculate the cost of equity capital if the market price of Scorpio Inc's shares is $50. c. Would you invest in this company if your required rate of return is 18 percent? Why? The dividend policy of Scorpio Inc. has been recently changed to payout 40 percent of its earnings to shareholders. The company has just paid dividends of $3 per share. a. Calculate the growth rate of dividends if the return on equity is 12 percent. b. Calculate the cost of equity capital if the market price of Scorpio Inc's shares is $50. c. Would you invest in this company if your required rate of return is 18 percent? Why?
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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