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I cannot figure out the correct answers to D. & E. I know the following answers to be correct. Please help. Thank you. A. $125

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I cannot figure out the correct answers to D. & E. I know the following answers to be correct. Please help. Thank you.

A. $125

B. $250 million

C. $20 million

D. ??????

E. ??????

F. The Same

image text in transcribed
Consolidated Pasta is currently expected to pay annual dividends of $10 a share in* perpetuity on the 2 . 0 million shares that are outstanding . Shareholders require a rate of return of 8 % from Consolidated stock .* 2 . What is the price of Consolidated stock ? ( Do not round intermediate calculations . ) Stock price 6 . What is the total market value of its equity ? ( Enter your answer in millions . " Market value of equity million Consolidated now decides to increase next year's dividend to $20 a share , without* changing it's investment or borrowing plans . Thereafter the company will revert to its policy of distributing $ 10 million a year .\ C. How much new equity capital will the company need to raise to finance the extra dividend payment ? ( Enter your answer in millions . ) New equity million* d . What will be the total present value of dividends paid each year on the new shares that* Present value million . . What will be the transfer of value from the old shareholders to the new shareholders ?" ( Enter your answer in millions . ) Transfer of value* million F. Is this figure more than , less than , or the same as the extra dividend that the old shareholders will receive ? OMore than OLess than The same

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