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Big Bus Tour Inc. recently paid a dividend of $150 per share, is currently expected to grow at a constant rate of 5%, and has

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Big Bus Tour Inc. recently paid a dividend of $150 per share, is currently expected to grow at a constant rate of 5%, and has a required return of 11%. Big Bus Tour Inc. has been approached to acquire a new company, Big Bus Tour Inc, estimates if it acquires the company, its constant growth rate would increase to 6.5%, but the firm would also be riskier, therefore increasing the required return of the company to 12%. Should Big Bus Tour Inc. go ahead with the acquisition of the new company? Yes, because the value of the Big Bus Tour Inc. will increase by $2,80 per share. No, because the value of the Big Bus Tour Inc. will decrease by $2.49 per share Yes, because the value of the Big Bus Tour Inc will increase by $1.59 per share. No, because the value of the Big Bus Tour Inc. will decrease by $3.42 per share

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