A company that is currently enjoying a 12.5% growth rate expects to pay dividends of P4.50 per share for its common stock offerings. If the estimated cost of capital for the company is 20%, determine the price for which the stocks should be offered.
A company that is currently enjoying a 12.5% growth rate expects to pay dividends of P4.50 per share for its common stock offerings. If the estimated cost of capital for the company is 20%, determine the price for which the stocks should be offered.
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 8P
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A company that is currently enjoying a 12.5% growth rate expects to pay dividends of P4.50 per share for its common stock offerings. If the estimated cost of capital for the company is 20%, determine the price for which the stocks should be offered. (Ans. P60.00/share)
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