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REH Corporation's most recent dividend was $ 2 . 1 8 per share, its expected annual rate of dividend growth is 5 % , and
REH Corporation's most recent dividend was $ per share, its expected annual rate of dividend growth is and the required return is now A variety of proposals are being considered by management to redirect the firm's activities. Determine the impact on share price for each of the following proposed actions.
aDo nothing, which will leave the key financial variables unchanged.
bInvest in a new machine that will increase the dividend growth rate to and lower the required return to
cEliminate an unprofitable product line, which will increase the dividend growth rate to and raise the required return to
dMerge with another firm, which will reduce the growth rate to and raise the required return to
e Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to and increase the required return to
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