Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Crystal Inc. just announced that it will cut its dividend from $ 3 . 6 to $ 2 . 1 per share and use the

Crystal Inc. just announced that it will cut its dividend from $3.6 to $2.1 per share and use the extra funds to expand its operations. Crystal's dividends were expected to grow at a 2.9% rate, and its share price was $37.9. With the new expansion, Crystal dividends are expected to grow at a 5.1% rate. Assuming the DDM can be applied to evaluate this company, what would be the new share price for Crystal after the change in the dividend? (Round your answer in dollars to 2 decimal places, e.g. put 1204.42 if your answer is 1204.4243.)

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_2

Step: 3

blur-text-image_3

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

Financial Management For Nurse Managers Merging The Heart With The Dollar Merging The Heart With The Dollar

Authors: J. Michael Leger, Janne Dunham-Taylor

4th Edition

1284127257, 978-1284127256

More Books

Students explore these related Finance questions