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Global Finance - Essay Example

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Author : schusterkailyn


Q1) Thomas brothers is expected to pay a $0.50 per share dividend at the end of year (i.e.D1 = $0.50). the dividend is expected to grow at a constant rate of 7 percent a year. The required rate of return on the stock Ks, is 15 percent. What is the value per share of the company's stock

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Global Finance

The stock dividend is expected to grow at a constant rate g. the stock currently sells for $25 a share. Assuming the market is in equilibrium. What does the market believe will be the stock price at the end of 3 years ( That is , what is P3)
Q3) Martell Mining Company's ore reserves are being depleted. So its sales are falling. Also, its pit is getting deeper each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5 percent per year. If D0=$5 and Ks=15%, what is the value of Martell Mining's
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