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Chiptech, | nc . , is an estsblished computer chip firm whth seversl profitsble exsting praducts s: well s; some promising new products in development.
Chiptech, nc is an estsblished computer chip firm whth seversl profitsble exsting praducts s: well s; some promising new products
in development. The compsny esrred $ o shars last yesr, snd just psid out o dvdend of $ per shse limestors believe the
compsny plans to maintsin its dwidend poyout ratio st ROE equslis Everyone in the market expects this stustion to persist
indefinitely.
a What is the market price of Chiptech stock? The required return for the computer chlp Induatry is snd the compsny has just
gone exdlvidend Le the next dividend will be podd yesr fram now, st tDo not round Intermedlate colculations. Found your
answer to decimal places.
Answer is complete and correct.
Morkot pripe of Criptoch stock
b Suppose you discover thast Chiptech's compettor has developed o new chp that will eliminate Chiptech's current technolagical
sdiventege in thrs morket. This new product, which will be resdy to come to the market in two years, will force Chlptech to reduce the
ntege in tha msiaet, This rew prosuet, which will be escly to come to the maket in two yes's, wit force Chiptech to reduce the
decresse the plowbesch reto to The plowbsck rrsto will be desressed st the end of the second yesr, st : The snnusl yesend
shsre? Hint: Curefully prepsres tsble of Chiptech's earnings: snd dlulsenda for esch of the next thres yesrs. Psy close sttention to the
change in the psyout rato in Round your answers to decimal places.
Answer is complete but not entirely correct.
c No one else in the morket percelves the threat to Cniptech's morket. In foct, you sre confident thst no one else will became sware of
the chenge in Chlptech's compettive ststus until the competitar firm publicly snnounces ts discovery nesr the end of yeer What wal
when the mariet catches an to the rew :tustian. A table of divdenda snd morket prices over tlme might he'p.Do not round
Intermediste calculations. Negatlive amount should be indlcsted by s minus sign. Round your answer to decimal places.
Answer is complete and correct.
d What will be the rate of return an Chlatech stack in the second year lbetween t and Do not round Intermediste
calculations. Negatlive amount should be lindicated by a minus slgn Round your answer to decimal places.
Answer is complete and correct.
e What will be the rate of return an Chiptech stock in the third yesr between snd Do not round Intermedlate
calculatlons. Negatlve amount should be Indicsted by a mlnus slgn Round your answer to declmal places.
Answer is complete and correct.
Could I please get help with b at time It seems to be the only thing wrong.
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