Find the fair price, LuLU Co. paid a dividend of 2 last

Find the fair price

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Reference no: EM131444512

LuLU Co. paid a dividend of 2 last year. They are expected to pay 2.2 this year. The rate of growth is expected to continue forever. Shareholders need to earn 15%. Find the fair price. 2. Jeffersonco stock is currently valued at 8 per share. Find the price of a 6 month call with an exercise price of 7. Jeffersonco variance is .04. The risk free rate is 3%. 3. The Cleaning Co can currently generate EPS of 4 per year forever by just maintaining current operations. Shareholders need to earn 12%. The co pays all the EPS as a dividend. The Co. has found a machine for sale that should earn a 15% return on investment. he hesitates to buy it, because he would have to retain 60% of the EPS to buy to run it, thus cutting his dividend. Calculate (and show) the numbers that can help the Co decide what he should do, then tell him.

Reference no: EM131444512

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