1. Elsinore assumes it can grow its dividend by 5% a year forever. If the last...
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1. Elsinore assumes it can grow its dividend by 5% a year forever. If the last dividend paid was $2 and the required rate of return is 10%, what is the current share price (approximately)? 2. a) $40 b) $20 C $44 d) $13 $42** Your firm has the following cash flows for each time periods(t): t=3 t=5 t=7 10,000 20,000 10,000 What is the present value of all the cash flows if the appropriate discount rate is 7.4% (approximately)? $26,899 a) b) $28,135** c) $46,375 d) $37,291 e) $40,000 1. Elsinore assumes it can grow its dividend by 5% a year forever. If the last dividend paid was $2 and the required rate of return is 10%, what is the current share price (approximately)? 2. a) $40 b) $20 C $44 d) $13 $42** Your firm has the following cash flows for each time periods(t): t=3 t=5 t=7 10,000 20,000 10,000 What is the present value of all the cash flows if the appropriate discount rate is 7.4% (approximately)? $26,899 a) b) $28,135** c) $46,375 d) $37,291 e) $40,000
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1 Elsinores Share Price The constant growth dividend discount model DDM can be used to estimat... View the full answer
Related Book For
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date:
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