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PLEASE HELP ME. Pharsalus Inc. just paid a dividend (i.e., D0) of $2.85 per share. This dividend is expected to grow at a rate of
PLEASE HELP ME.
Pharsalus Inc. just paid a dividend (i.e., D0) of $2.85 per share. This dividend is expected to grow at a rate of 3.5 percent per year forever. The appropriate discount rate for Pharsalus's stock is 11.0 percent. What is the price of the stock? (Round your answer to 2 decimal places and record your answer without dollar sign or commas). Your Answer: Answer Question 8 (7 points) The stock of Robotic Atlanta Inc. is trading at $20.75 per share. In the past, the firm has paid a constant dividend (i.e., g=0 ) of $5.60 per share and it has just paid an annual dividend (i.e., DO =5.60 ). However, the company will announce today new investments that the market did not know about. It is expected that with these new investments, the dividends will grow at 6.9% forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? (Round your answer to 2 decimal places and record your answer without dollar sign or commas). Your Step by Step Solution
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