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if someone would be able to answer all of these questions that would be much apreciated 1) A stock pays a dividend of $5.00 in
if someone would be able to answer all of these questions that would be much apreciated
1) A stock pays a dividend of $5.00 in year 1,$5.25 in year 2 , and $5.60 in year 3. The dividend then grows at 3% a year forever. The required return for this stock is 10%. a. What is the present value of the first three dividend payments? b. At the end of year 3 , what would be the present value of the remaining dividends? (That is, the 4th dividend on. The units are year 3 dollars.) c. Take your answer to b. and determine its present value today. (You need to discount it back three years.) d. What is the price of the stock? 2) A company has a target capital structure of: The firm's cost for these securities is: What is the firms WACC? (Assume the company doesn't pay taxes, so you can ignore that term.) Step by Step Solution
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