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Please help & Explain Polycorp has just paid a dividend of $5. The company pays dividends annually. Dividends are expected to grow at 0.13 pa
Please help & Explain
Polycorp has just paid a dividend of $5. The company pays dividends annually. Dividends are expected to grow at 0.13 pa for the next two years and for 0.03 thereafter for the foreseeable future. At what price should the shares sell for at the end of year two if the required rate of return is 0.18? Answer to the nearest cent, e.g $5.678 should be entered as 5.68. Do not enter the $ sign. Note that all growth rates and the required rate are expressed as a decimal, so .06 is 6% pa. Polycorp is about to issue debentures. The following information is available. 1. The coupon rate is 8% pa (or.08). Coupons are paid annually 2. The yield to maturity (YTM) is 0.06 pa 3. The face value is $100 4. The term is 3 years How much can the debentures be issued for? Your answer should be accurate to the nearest cent. Note that the YTM is expressed as a decimal, So .06 is 6% paStep by Step Solution
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