Using the data from problem 5: a. If D1 and Ke remain the same, but g goes
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a. If D1 and Ke remain the same, but g goes up to 9 percent, what will the new stock price be? Briefly explain the reason for the change.
b. If D1 and g retain their original value ($1.60 and 8 percent), but Ke goes up to 15 percent, what will the new stock price be? Briefly explain the reason for the change.
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a The more rapid growth rate reduced the denominator and increased ...View the full answer
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Related Book For
Fundamentals of Investment Management
ISBN: 978-0078034626
10th edition
Authors: Geoffrey Hirt, Stanley Block
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