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The FI Corporation's dividends per share are expected to grow Indefinitely by 5% per year. Required: a. If this year's year-end dividend Is $8 and
The FI Corporation's dividends per share are expected to grow Indefinitely by 5% per year. Required: a. If this year's year-end dividend Is $8 and the market capltalization rate is 10% per year, what must the current stock price be according to the dividend discount model? (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) b. If the expected earnings per share are $13, what is the Implled value of the ROE on future Investment opportunitles? (Do not round Intermedlate calculatlons. Round your answer to 2 decimal places.) c. How much Is the market payIng per share for growth opportunitles (that Is, for an ROE on future Investments that exceeds the market capitalization rate)? (Do not round Intermedlate calculations. Round your answer to 2 decimal places.)
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