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Author Question: Waterfront Solutions, Inc paid a dividend of 5.00 per share on its common stock yesterday. ... (Read 64 times)

captainjonesify

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  • Posts: 543
on: Jul 10, 2018
Waterfront Solutions, Inc paid a dividend of 5.00 per share on its common stock yesterday.
  Dividends are expected to grow at a constant rate of 4 for the next two years, at which point the
  stock is expected to sell for 56.00.
 
  If investors require a rate of return on Waterfront's common
  stock of 18, what should the stock sell for today?
  A) 44.76 B) 40.22 C) 50.22 D) 48.51

Question 2

The residual dividend theory is based on the observation that flotation costs make the cost of new
  common stock significantly higher than the cost of retained earnings.
 
  Indicate whether the statement is true or false


jsm54321

  • Sr. Member
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Reply #1 on: Jul 10, 2018
Answer to Question 1

D

Answer to Question 2

TRUE


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