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The current risk-free rate is 2.5%. The market risk premium is 5%. If CC's market beta is 1.5, Actual Projected 2015 Year + 1 Year
The current risk-free rate is 2.5%. The market risk premium is 5%. If CC's market beta is 1.5,
Actual | Projected | |||||
2015 | Year +1 | Year +2 | Year +3 | Year +4 | Year +5 | |
Comprehensive Income | $13,696 | $27,990 | $30,048 | $32,252 | $34,612 | $37,138 |
Common Shareholders Equity: | ||||||
Paid-In Capital | $8,626 | $9,488 | $10,438 | $11,482 | $12,630 | $13,892 |
Retained Earnings | 127,320 | 137,384 | 154,036 | 161,914 | 187,910 | 194,048 |
Accumulated Other Comprehensive Income | (5,376) | (5,376) | (5,376) | (5,376) | (5,376) | (5,376) |
Total Common Equity | $130,570 | $141,496 | $159,098 | $168,020 | $195,164 | $202,564 |
Interest-bearing debt | $130,000 |
Preferred stock | 0 |
Interest expense per year | 6% |
Tax rate | 30.00% |
Number of common shares | 5,000 |
Market price per common share | $79.00 |
Non-controllng interest | $25,000 |
Tax rate | 30% |
Steady-state growth rate | 2.0% |
What is the present value of CC's dividends from year+1 through year+5 excluding the continuing value. Ignore any mid-year discounting.
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