Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Caspian Sea Drinks needs to raise $39.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $1.45

image text in transcribed
image text in transcribed
Caspian Sea Drinks needs to raise $39.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $1.45 next year, which will grow at 4.82% forever and the cost of equity to be 10.82%, then how many shares of stock must CSD sell? Submit Answer format: Number: Round to: 0 decimal places Suppose the risk-free rate is 1.60% and an analyst assumes a market risk premium of 7.95%. Firm A just paid a dividend of 51.47 per share. The analyst estimates the 3 of Firm A to be 1.44 and estimates the dividend growth rate to be 4.96% forever. Firm A has 256.00 million shares outstanding Firm B just paid a dividend of $1.70 per share. The analyst estimates the of Firm B to be 0.86 and believes that dividends will grow at 3.00% forever. Firm B has 188.00 million shares outstanding. What is the value of Firm B? Submit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Finance With Excel

Authors: Simon Benninga

2nd Edition

0199755477, 9780199755479

More Books

Students also viewed these Finance questions

Question

4. How is the term DSS used in the academic world?

Answered: 1 week ago