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abbccbdte AaBbccbdEe AaBbcc ABC Lula v Normal No Spacing Heading 1 Headin Question 8: Cooperton Mining just announced it will cut its dividend from $4.06 to $2.47 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.4% rate, and its share price was $51.07. With the planned expansion, Cooperton's dividends are expected to grow at a 4.7% rate. What share price would you expect after theannouncement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment? The new price for Cooperton's shares will be $L (Round to the nearest cent.) Question 9 Highline Corporation has just paid an annual dividend of $1.03. Analysts are predicting an 11.2% per year growth rate in earnings over the next five years. After that, Highline's earnings are expected to grow at the current industry average of 5.4% per year. If Highline's equity cost of capital is 8.6% per year and its dividend payout ratio remains constant, for what price does thedividend-discount model predict Highline shares should sell? The value of Highline's shares is (Round to the nearest cent.) Question 10: Hallford Corporation expects to have earnings this coming year of $3.023 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 55% of its earnings. It will retain 20% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 19.8% per year. Any earnings that are not retained will be paid out as dividends. Assume Haliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Hallford's equity cost of capital is 9.5%, what price would you estimate for Halliford shares? The share price will be $L (Round to the nearest cent.)
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