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The remaining $100,000 for the building purchase will be financed by equity investment. The board of directors has agreed to issue additional shares to raise
The remaining $100,000 for the building purchase will be financed by equity investment. The board of directors has agreed to issue additional shares to raise this money. Given the previous liabilities, only $1 annual dividends are expected for the next 4 years. Starting in year 5, the board plans to issue dividends of $2 a year growing at 4% annually. If the required rate of return for this business is 8% annually, what is the stock price today? How many shares must be issued at this stock price to raise the $100,000?
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