Question
You are hired to analyze the following company and make a recommendation. Use the dividend discount model to explain your answer. Show all your computations.
You are hired to analyze the following company and make a recommendation. Use the dividend discount model to explain your answer. Show all your computations. [For the k use 4 decimal points).
| MXJ Comp |
| Earnings growth rate: 12% |
| Dividends growth rate: -2% |
| Current annual dividend: $1.95 |
| Actual EPS: $3.25 |
| Market risk premium: 3% |
| Risk free rate: 1.25% |
| Beta: 1.40 |
| Current Market Price: $20.70 |
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Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
3rd edition
978-0078025549
