Question
Ecology Labs Incorporated will pay a dividend of $2.90 per share in the next 12 months (D1). The required rate of return (Ke) is 15
Ecology Labs Incorporated will pay a dividend of $2.90 per share in the next 12 months (D1). The required rate of return (Ke) is 15 percent and the constant growth rate is 6 percent. Note: Each question is independent of the others. Compute the price of Ecology Labs' common stock. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume Ke, the required rate of return, goes up to 19 percent. What will be the new price? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume the growth rate (g) goes up to 9 percent. What will be the new price? Ke goes back to its original value of 15 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume D1 is $3.50. What will be the new price?
Assume Ke is at its original value of 15 percent and g goes back to its original value of 6 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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Applied Equity Analysis and Portfolio Management Tools to Analyze and Manage Your Stock Portfolio
Authors: Robert A.Weigand
1st edition
978-111863091, 1118630912, 978-1118630914
