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4. Use this information to answer both parts a and b of question 4. BaiMining has been selling for $8 a share. a. The perception
4. Use this information to answer both parts a and b of question 4. BaiMining has been selling for $8 a share. a. The perception of the market is that BaiMining's dividends will be constant at 50 per share per year. What is the implied discount rate used in pricing BaiMining? Explain and show your computations. (five points) b. A financial advisor announces she believes BaiMining's dividends will continually decrease at a rate of 2% per year, beginning with next year's dividends. What will be the impact on the price of BaiMining if market participants believe this new analysis? Explain and show your computations. (five points)
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