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Fiesta28 [93]
3 years ago
14

High valley antiques would like to issue new equity shares if its cost of equity declines to 10.5 percent. the company pays a co

nstant annual dividend of $1.60 per share. what does the market price of the stock need to be for the firm to issue the new shares
Business
1 answer:
True [87]3 years ago
8 0

The price of the share would be calculated as -

Price of share = Annual constant dividend / Cost of equity

Given, cost of equity = 10.5 %

Annual constant dividend = $ 1.60

Price of share = $ 1.60 ÷ 10.50 %

Price of share = $ 15.238 or $ 15.24

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