Question
Stock ValuationA. Based on the figures provided, calculate each of the following:1. The new dividend yield if the company increased its dividend per share by
Stock ValuationA. Based on the figures provided, calculate each of the following:1. The new dividend yield if the company increased its dividend per share by 1.752. The dividend yield if the firm doubled its outstanding shares3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated aboveB. What effect would you expect each of the calculations you performed to have in terms of shareholder value? In other words, suppose thecompanys goal is to maximize shareholder value. How will each of the situations support or inhibit that goal? Be sure to justify your reasoning.C. To what extent do you feel the companys dividend policies support or hinder their strategies? For example, if the company is attempting togrow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends? Be sure to substantiate yourclaims.
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