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a. Calculate the future growth rate for Solarpower's earnings. b. If the investor's required rate of return for Solarpower's stock is 14 percent, what would
a. Calculate the future growth rate for Solarpower's earnings. b. If the investor's required rate of return for Solarpower's stock is 14 percent, what would be the price of Solarpower's common stock? percent.) investor's required rate of return remains at 14 percent and that all future new projects will earn 21 percent.) a. Wvnat is the tuture growtn rate tor olarpower s earnngs? 6 (Round to two decimal places.) b. If the investor's required rate of return for Solarpower's stock is 14%, what would be the price of Solarpower's common stock? (Round to the nearest cent.) c. What would happen to the price of Solarpower's common stock if it had raised its dividends to $14(D0=$14) and then continued with that same dividend payout ratio permanently? (Round to the nearest cent.) Should Solarpower make this change? (Select from the drop-down menus.) Solarpower raise its dividend because the retention ratio will and the value of the common stock will d. What would happen to the price of Solarpower's common stock if it had lowered its dividends to $2(D0=$2) and then continued with that same dividend payout ratio permanently? (Round to the nearest cent.) Does the constant dividend growth rate model work in this case? Why or why not? (Select the best choice below.) lower growth rate. that houses it can only grow at a higher rate. that houses it can only grow at a lower rate. hiaher arowth rate
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