Author Question: Tina's Medical Equipment Company paid 2.25 common stock dividend last year. The company's policy is ... (Read 99 times)

Kikoku

  • Hero Member
  • *****
  • Posts: 540
Tina's Medical Equipment Company paid 2.25 common stock dividend last year. The company's policy is to allow its dividend to grow at 5 percent per year indefinitely. What is the value of the stock if the required rate of return is 8 percent?
 
  What will be an ideal response?

Question 2

In the development of pro forma statements, a firm that requires external funds means that its projected level of cash is in excess of its needs and that funds would therefore be available for repaying debt, repurchasing stock, or increasing the
 
  dividend to stockholders.
  Indicate whether the statement is true or false



poopface

  • Sr. Member
  • ****
  • Posts: 339
Answer to Question 1

P = D1 / (r - g) = 2.25  (1 + 0.05 ) / (0.08 - 0.05 ) = 78.75

Answer to Question 2

FALSE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

The oldest recorded age was 122. Madame Jeanne Calment was born in France in 1875 and died in 1997. She was a vegetarian and loved olive oil, port wine, and chocolate.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

According to the Migraine Research Foundation, migraines are the third most prevalent illness in the world. Women are most affected (18%), followed by children of both sexes (10%), and men (6%).

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

For a complete list of videos, visit our video library