Question
Show your full work and excel formulas/ calculator steps for full credit. Q2. The remaining $450,000 for the building purchase will be financed by equity
Show your full work and excel formulas/ calculator steps for full credit.
Q2. The remaining $450,000 for the building purchase will be financed by equity investment. The board of directors has agreed to issue additional shares to raise this money. Given the business's previous liabilities, only $1 annual dividends are expected for the next 3 years. Starting in year 4, the board plans to issue dividends of $2 a year growing at 5% annually. If the required rate of return for this business is 15% annually, what is the stock price today? How many shares must be issued at this stock price to raise the 450,000?
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