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please show me how you solved this Consider the case of Portman Industries: Portman Industries just paid a dividend of $3.12 per share. The company
please show me how you solved this
Consider the case of Portman Industries: Portman Industries just paid a dividend of $3.12 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year. The risk-free rate (TR) is 3.00% , the market risk premium (RPM) is 3.60%, and Portman's beta is 1.10. Assuming that the market is in equilibrium, use the information just given to complete the table. (Note: Do not round your intermediate calculations.) Term Value Dividends one year from now (D) (Note: Rounded to four decimal places) Horizon value (Pi) (Note: Rounded to two decimal places) Intrinsic value of Portman's stock (Note: Rounded to two decimal places) What is the expected dividend yield for Portman's stock today? 4.76% 3.65% O4.45% 4.56% Now let's apply the results of your calculations to the following situation: Portman has 1,100,000 shares outstanding, and Judy Davis, an investor, holds 16,500 shares at the current price (computed above). Suppose Portman is considering issuing 137,500 new shares at a price of $65.14 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman Industries be diluted on a per-share basis? O $1.28 per share O $1.09 per share O $2.69 per share O $1.57 per share Thus, Judy's investment will be diluted, and Judy will experience a total of Step by Step Solution
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