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Management action and stock value REH Corporation's most recent dividend was $2.63 per share, its expected annual rate of dividend growth is 5%, and the

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Management action and stock value REH Corporation's most recent dividend was $2.63 per share, its expected annual rate of dividend growth is 5%, and the required return is now 15% A variety of proposals are being considered by management lo redirect the firms activities. Determine the impact on share price for each of the following proposed actions a. Do nothing which will leave the key financial variables unchangod b. Invest in a new machine that will increase the dividend growth rate to 6% and lower the required return to 14% : c. Eliminate an unprofitable product line, which will increase the dividend growth rate to 9% and rabe the required return to 17l d. Merge with another firm, which will reduce the growth rate to 2% and ralse the required retum to 16% e. Acquire a subsidiary operation from another manuiactorer. The aceuisition should increase the dividend growath rate to 9% and increase the fequired return to 17% a. If the firm does nothing that will leave the key financial variablos unchangod, the value of the firm will bes (Round to the nearest cent)

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