Question
a. ProFlex Corporations stock currently sells for $100.00 per share. If investors expect a constant dividend of $6.00 per share in perpetuity, what is the
a. ProFlex Corporations stock currently sells for $100.00 per share. If investors expect a constant dividend of $6.00 per share in perpetuity, what is the implied market capitalization rate (r)? (For Part A & B please State your answer as a percent)
b. Referring to part (a), what would the implied market capitalization rate be if investors believed that dividends will grow at a constant rate of 2% per year in perpetuity?
(Assume that today's price is still $100.00 and that next year's dividend = $6.00.)
c. Under the assumptions of part (a), how much will ProFlex Corporation stock be worth in 10 years?
d. Under the assumptions of part (b), how much will ProFlex Corporation stock be worth in 10 years?
Please Show your work I got the answer wrong... Thank you!
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