Question
If someone could show me exactly how to work these out step by step that would be great!!!!! A.) Dividend valuation model for new public
If someone could show me exactly how to work these out step by step that would be great!!!!! A.) Dividend valuation model for new public issue. The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation. Dividents (D1) at the end of the current year will be $1.44. The growth rate (g) is 8 percent and the discount rate (Ke) is 12 percent. i) What should be the price of the stock to the public? ii) If there is a 6 percent total underwriting spread on the stock, how much will the issuing corporation receive? iii) If the issuing corporation requires a net price of $34.50 (proceeds to the corporation) and there is a 6 percent underwriting spread, what should be the price of the stock to the public? B.) Are there any disadvantages to being a public company?? C.) Garland Corporation has a bond outstanding with a $90 annual interest payment, a market price of $820, and a maturity date in five years.. Find the: i) Coupon rate ii)Current rate iii)Approximate yield to maturity D.) In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share Year Plan A Plan B 1.......... $1.50 $ .50 2.......... 1.50 2.00 3.......... 1.50 .20 4.......... 1.60 4.00 5.......... 1.60 1.70 i) How much in total dividends per share will be paid under each plan over the five years? Would you choose plan A or plan B?
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