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Early In 2010, Inez Marcus, the chief financial officer (CFO) for the firm expects that without the proposed investment, the Suarez Manufacturing, was given the

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Early In 2010, Inez Marcus, the chief financial officer (CFO) for the firm expects that without the proposed investment, the Suarez Manufacturing, was given the task of assessing the impact dividend in 2010 will be $2.09 per share and the historical annual of a proposed risky investment on the firm's stock value. To rate of growth (rounded to the nearest whole percent) will perform the necessary analysis, Inez gathered the following continue in the future. Currently, the required return on the information on the firm's stock During the immediate past 5 years common stock is 14% (2005-2009), the annual dividends paid on the firm's common Inez's research indicates that if the proposed investment is stock were as follows: undertaken the 2010 dividend will rise to $2.15/share. The annual rate of dividend growth will be 13% until 2012 and then at Year Dividend the beginning of 2013 onwards, would return to the rate that was experienced between 2005 and 2009 (Hint use present value 2009 $ 1.90 formula to calculate the Compounding Annual Growth Rate "CAGR"). As a result of the increased risk associated with the 2008 $1.70 proposed risky investment, the required return on the common stock is expected to increase by 2% to an annual rate of 16% 2007 $1.55 regardless of which dividend growth outcome occurs 2006 $ 1.40 Armed with the preceding information, Inez must now assess the impact of the proposed risky investment on the market value of Suarez's stock. To simplify her calculations, she plans to round the 2005 $1.30 historical growth rate in common stock dividends to the nearest whole percent Note: year 2009 is your year tero Early In 2010, Inez Marcus, the chief financial officer (CFO) for the firm expects that without the proposed investment, the Suarez Manufacturing, was given the task of assessing the impact dividend in 2010 will be $2.09 per share and the historical annual of a proposed risky investment on the firm's stock value. To rate of growth (rounded to the nearest whole percent) will perform the necessary analysis, Inez gathered the following continue in the future. Currently, the required return on the information on the firm's stock During the immediate past 5 years common stock is 14% (2005-2009), the annual dividends paid on the firm's common Inez's research indicates that if the proposed investment is stock were as follows: undertaken the 2010 dividend will rise to $2.15/share. The annual rate of dividend growth will be 13% until 2012 and then at Year Dividend the beginning of 2013 onwards, would return to the rate that was experienced between 2005 and 2009 (Hint use present value 2009 $ 1.90 formula to calculate the Compounding Annual Growth Rate "CAGR"). As a result of the increased risk associated with the 2008 $1.70 proposed risky investment, the required return on the common stock is expected to increase by 2% to an annual rate of 16% 2007 $1.55 regardless of which dividend growth outcome occurs 2006 $ 1.40 Armed with the preceding information, Inez must now assess the impact of the proposed risky investment on the market value of Suarez's stock. To simplify her calculations, she plans to round the 2005 $1.30 historical growth rate in common stock dividends to the nearest whole percent Note: year 2009 is your year tero

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