=+LG 4 P725 ETHICS PROBLEM Melissa is trying to value the stock of Generic Utility Inc., which
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=+LG 4 P7–25 ETHICS PROBLEM Melissa is trying to value the stock of Generic Utility Inc., which is clearly not growing at all. Generic declared and paid a $5 dividend last year. The required return for utility stocks is 11%, but Melissa is unsure about the financial reporting integrity of Generic’s finance team. She decides to add an extra 1% “credibility” risk premium to the required return as part of her valuation analysis.
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Related Book For
Principles Of Managerial Finance
ISBN: 9781292261515
15th Global Edition
Authors: Chad J. Zutter, Scott Smart
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