k s 10 g 5 DIV 1 $1 k RF 3 s 1 What is the estimated worth of ABCs stock Assume ABCs growth rate rises to 6 How does this affect ABCs stock If ABC is not expected to grow, what will its stock price become If k s for ABC rises to 12 , what will its stock price become If ABC increases its debt level, what effect will it have on its s Explain why k s must be less than g What are the advantages of using the Gordon Growth Model, which is premised on expected future dividends If ABC increases its debt level but does not increase its profits (the bottom line), what is the initial effect on its stock price The model shows that a company's stock price is sensitive to the dividend growth rate chosen and that the growth rate cannot exceed the cost of equity Is this always true What is the difference between the two versions of the Gordon Growth Modelthe stable growth model and the multistage growth mode Pleaseee Answer Q NO 3

Question

k s   10  g   5  DIV 1   $1 k RF   3  s   1 What is the estimated worth of ABCs stock  Assume ABCs growth rate rises to 6   How does this affect ABCs stock  If ABC is not expected to grow, what will its stock price become  If k s for ABC rises to 12 , what will its stock price become  If ABC increases its debt level, what effect will it have on its s   Explain why k s must be less than g  What are the advantages of using the Gordon Growth Model, which is premised on expected future dividends  If ABC increases its debt level but does not increase its profits (the bottom line), what is the initial effect on its stock price  The model shows that a company's stock price is sensitive to the dividend growth rate chosen and that the growth rate cannot exceed the cost of equity  Is this always true  What is the difference between the two versions of the Gordon Growth Modelthe stable growth model and the multistage growth mode Pleaseee Answer Q NO 3

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k s = 10% g = 5% DIV 1 = $1 k RF = 3% s = 1 What is the estimated worth of ABCs

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