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A stock just paid a dividend of $5.00. The dividend is expected to grow at a rate of 20% for a period of three years
A stock just paid a dividend of $5.00. The dividend is expected to grow at a rate of 20% for a period of three years and then settle down to a long run stable growth rate of 5%. If the market requires a rate of return of 15% to hold assets of this risk, what price should the stock trade at? Select one: O a. $59.64 O b. $66.24 O c. $69.81 O d. $75.98 O e. None of the above are correct solutions A firm has the following numbers extracted from its Financial Statements: EBIT $3,500 $ 100 $1,250 $1,000 Depreciation expense Taxes paid Annual Net Capital Spending Increase in Net Working Capital $200 What is the firm's cash flow from the assets (CFFA), an amount equal to the cash available to be paid out to the stockholders and the bondholders? Select one: O a. $1,150 O b. $1,350 O c. $2,400 O d. $2,600 O e. None of the above are correct solutions
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