Question
Suppose that you are the CEO and have 50% +1 share of ownership of the firm, James Cobin Co, headquartered in Toronto, Ontario, producing semi-
Suppose that you are the CEO and have 50% +1 share of ownership of the firm, James Cobin Co, headquartered in Toronto, Ontario, producing semi- conductor for IT firms mainly in Silicon Vally, California. Your firms common stocks annual dividend for the next 3 years is expected to be $5.00 Thereafter, the dividend is expected to grow 4% per year. The market expects 11% return on the stock. Suppose that you are the CEO and have 50% +1 share of ownership of the firm, James Cobin Co, headquartered in Toronto, Ontario, producing semi- conductor for IT firms mainly in Silicon Vally, California. Your firms common stocks annual dividend for the next 3 years is expected to be $5.00 Thereafter, the dividend is expected to grow 4% per year. The market expects 11% return on the stock.
a. Compute the stock price today and at the beginning of each of the next 3 years.
b. Compute the dividend yield and capital gains yield for each year.
c. Compute the sum of the dividend yield and capital gains yield. What do you find from this?
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The Legal Environment Today Summarized Case Edition
Authors: Roger LeRoy Miller
8th Edition
130526276X, 978-1305279407, 1305279409, 978-1305704930, 1305704932, 978-1305262768
