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please answer all parts,they go together. thank you Systems has revised its growth prospects and now expects its dividends to grow at a rate of
please answer all parts,they go together. thank you
Systems has revised its growth prospects and now expects its dividends to grow at a rate of 3.5% per year forever. a. What is the drop in value of a share of Summit Systems stock based on this information? D. If you tried to sell your Summit Systems stock after reading this news, what price would you be likely to get? Why? Roybus, Inc., a manufacturer of flash memory, just reported that its main production facility in Taiwan was destroyed in a fire. Although the plant was fully insured, the loss of production will decrease Roybus's free cash flow by $184 million at the end of this year and by $56 million at the end of next year. a. If Roybus has 38 million shares outstanding and a weighted average cost of capital of 13.4%, what change in Roybus's stock price would you expect upon this announcement? (Assume that the value of Roybus's debt is not affected by the event.) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a profit? ExplainStep by Step Solution
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