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#29 0. Advanced Problems 29. Ecology Labs, Inc., will pay a dividend of $3 per share in the next 12 months (D). The required rate
#29
0. Advanced Problems 29. Ecology Labs, Inc., will pay a dividend of $3 per share in the next 12 months (D). The required rate of return (K) is 10 percent and the constant growth rate is 5 percent. a. Compute Po- (For parts b, c, d in this problem, all variables remain the same except the one specifically changed. Each question is independent of the others.) b. Assume K, the required rate of return, goes up to 12 percent; what will be the new value of Po? C. Assume the growth rate (g) goes up to 7 percent; what will be the new value of Po? Ke goes back to its original value of 10 percent. d. Assume D, is $3.50; what will be the new value of Po? Assume K, is at its original value of 10 percent and g goes back to its original value of 5 percent. Sterling Corn naid a dividend of $ 90 Inst 30 Step by Step Solution
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