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help me help me help me Question 6 (1.33 points) A company just paid a dividend of DO = $2.35. Analysts expect the company's dividend
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Question 6 (1.33 points) A company just paid a dividend of DO = $2.35. Analysts expect the company's dividend to grow by 30% in Year 1, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this stock is 9.00%. What is the best estimate of the stock's current market value? 74.52 79.88 78.13 83.45 81.55 Question 7 (1.34 points) Magnolia's owners Chip and Jo hire you as a consultant for an upcoming recapitalization of their company. The company's current capital structure is 10% debt and 90% equity, the WACC is 11.10%, and the value of the firm is $900. You determine that the optimal capital structure is 30% debt and 70% equity, which will result in a new WACC of 10.40% and a new firm value of $962. The firm currently has no short-term investments, and it will use all of the new debt it issues to repurchase shares. How much debt (to the nearest million) should the company issue to achieve its target capital structure? $146 $219 $199 $247 $151 ABC Inc. has a value of operations of $20,000, short-term investments of $1,000, $6,000 in debt, and 275 shares outstanding. The company plans on distributing $50 through stock repurchases. Assuming the repurchase does not signal new information, what will the stock price be immediately following the repurchase? $56.36 $51.90 $58.01 $54.55 $52.73 Step by Step Solution
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