Answer:
Market change risks, credit risks, and interest rate risks must all be taken into account. The only type of risk which does not apply are the environmental risks
Answer:
If a firm decreases its sustainable growth rate (g), the price of their stock will probably decrease. I will use the following example:
P₀ = Div₁ / (Re - g)
P₀ = $2 / (12% - 5%) = $28.57
if the growth rate g decreases to 2%, and the rest remains unchanged, then
P₀ = $2 / (12% - 2%) = $20
Answer:
$2.90 approx
Explanation:
The computation of firm’s cash dividend be in seven years
First we need to find out the
Growth Rate = (Last Dividend ÷ Dividend 4 years ago)^(1 ÷ 4) - 1
= ($2.36 ÷ $1.73)^(1 ÷ 4) - 1
= $1.36^0.35 - 1
= 1.113624092 - 1
= 0.113624092
= 11.36%
Now we calculate for 5 years
Dividend in 5 years = $2.36 × 1.113624092
= $2.628
and Dividend in 7 Years = Dividend in 5 years × (1 + 5%)^2
= $2.628 × 1.05^2
= $2.628 × 1.1025
= $2.90 approx
About one perhaps and i hope we can be good friends and someone correct me!!!!
