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Please use formulas instead of excel to solve this Q1 (Part b) (8 Points): Carbon Energy Corporation will pay a dividend of $0.75 per share
Please use formulas instead of excel to solve this
Q1 (Part b) (8 Points): Carbon Energy Corporation will pay a dividend of $0.75 per share at the end of year one. They intend to keep paying $0.75 annual dividends until 4 years from now. At that time they anticipate undertaking a major exploration initiative which will cause the dividends following year four to decline at 1% per year until the dividend paid at the end of year seven is made. Subsequent dividends are then expected to grow at 1% per year indefinitely. On the basis of these projections calculate the current trading price of Carbon stock assuming that investors expect a return from Carbon stock of 16% per year compounded quarterlyStep by Step Solution
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