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TT Corp. expects to have earnings per share of $6 in the coming year. Rather than reinvest these earnings and grow, the firm plans to
TT Corp. expects to have earnings per share of $6 in the coming year. Rather than reinvest these earnings and grow, the firm plans to pay out all of its earnings as a dividend. With these expectations of no growth, TT Corp.s current share price is $51.3. Suppose TT Corp. decides to cut its dividend payout rate to 75% to invest in new factories. The return on these new investments is 8.6%. We assume that the risk of the new investments is the same as its existing investments, estimate TT Corp.s stock price after the change in the dividend policy. Answer format: Round to two decimals, no unit.
TT Corp. expects to have earnings per share of $6 in the coming year. Rather than reinvest these earnings and grow, the firm plans to pay out all of its earnings as a dividend. With these expectations of no growth, TT Corp.s current share price is $51.3.
Suppose TT Corp. decides to cut its dividend payout rate to 75% to invest in new factories. The return on these new investments is 8.6%. We assume that the risk of the new investments is the same as its existing investments, estimate TT Corp.s stock price after the change in the dividend policy.
Answer format: Round to two decimals, no unit.
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Personal Trainer Online Purchase Managerial Accounting
Authors: Carl S. Warren, James M. Reeve, Philip E. Fess
8th Edition
0324204604, 978-0324204605
