Question
ABC Corporation has a current stock price of $ 20.87 and is expected to pay a dividend of $ 1.00 in one year. Its expected
ABC Corporation has a current stock price of $ 20.87 and is expected to pay a dividend of $ 1.00 in one year. Its expected stock price right after paying that dividend is $ 23.04.
a. ABC's equity cost of capital is:
b. How much of ABC's equity cost of capital is expected to be satisfied by dividend yield?
c. How much of ABC's equity cost of capital is expected to be satisfied by capital gains?
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Mergers Acquisition And Other Restructuring Activities
Authors: Donald M. Depamphilis
6th Edition
123854857, 978-0123854858
