Question
TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million
TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million per quarter in perpetuity. Suppose that the discount rate, expressed as an effective annual rate (EAR), is 16%. TEME pays dividends quarterly.
What is the value of TEME if it continues to pay out all of its earnings as dividends? Assume that the next dividend is paid one quarter from now.
*Make sure to input the answer without any currency symbols, commas, and remove M as Million value.
e.g. 6,000,000 = 6M, so the answer should be written as 6
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Financial Accounting
Authors: David Spiceland, Wayne M. Thomas, Don Herrmann
5th edition
1259914895, 978-1259914898
