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The management of company A, whose share is traded at 20, has decided to give a fixed dividend to shareholders in perpetual equal to 3
The management of company A, whose share is traded at 20, has decided to give a fixed dividend to shareholders in perpetual equal to 3 . In addition, the expected return of the share has been estimated at 9% while the interest rate without risk is 1.5%. Provided that the asset valuation model is valid of the market (CAPM), what will be the new share price of company A if triple the coefficient b of the share with all other parameters constant? To comment on your answer
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