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Common Stock Value: Variable Growth
Lawrence Industries' most recent annual dividend was $1.80 per share (D o = $1.80), and the firm's required rate of return is 11%. Find the market value of Lawrence's shares when:
a) Dividends are expected to grow at 8% annually for 3 years, followed by a 5% constant annual growth rate in years 4 to infinity.
b) Dividends are expected to grow at 8% annually for 3 years, followed by a 0% constant annual growth rate in years 4 to infinity.
c) Dividends are expected to grow at 8% annually for 3 years, followed by a 10% constant annual growth rate in years 4 to infinity.
Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 8.9 percent. The bonds make semiannual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?
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Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,310,000. The fixed asset falls into the three-year MACRS class (MACRS Table). What is the net cash flow of the project for the fo..
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On January 1, 1998, John deposited $ 1000 into Bank X to earn interest at rate i per annum compounded quarterly. On January 1, 2003, he transferred his account to Bank Y to earn interest at rate j per annum compounded quarterly.
What investment accumulates more interest--15% compounded semi annually, or 14% compounded daily?
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