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Question 2 (10 marks) You are analysing a US listed company, Countless Co. and you find that Countless has issued both bond and stocks
Question 2 (10 marks) You are analysing a US listed company, Countless Co. and you find that Countless has issued both bond and stocks 2 years ago. (a) Explain TWO differences between issuances of bond and stock in raising capital on both the company and the investors. (4 marks) (b) Suppose Countless Co. is expected to increase dividends by 25% in year one and by 20% in year two. After that, dividends will increase at a rate of 6% per year indefinitely. If the last dividend (just paid) was $9 and the required return is 15%, Calculate the price of the Countless Co. (6 marks)
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