What is the value of Maxwell Mining stock

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Q1. Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 6% per year. If D0 = $2 and rs = 17%, what is the value of Maxwell Mining's stock?

Q2. A stock is expected to pay a dividend of $1.50 at the end of the year (i.e., D1 = $1.50), and it should continue to grow at a constant rate of 5% a year. If its required return is 14%, what is the stock's expected price 3 years from today? Do not round intermediate calculations.

Reference no: EM133123381

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