Q#1 The Exotic Emig Company has a required rate of return of 9% and is expected to
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Q#1
The Exotic Emig Company has a required rate of return of 9% and is expected to grow at a constant rate of 4% in the foreseeable future. If the firm's last dividend paid was $3, what is the expected capital gains yield?
Q# 2
The Paper Peddler Plumbing Company has a historical growth in its free cash flows of 3% with little variability. With the addition of a new plant and equipment, however, you expect free cash flows will grow 7% in Year 1, 5% in Year 2, and 4% thereafter. The firm's last free cash flow was $100,000. The firm has a required rate of return of 10%. What is the expected value of the firm's operations?
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
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