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 D is $3 and rs is 10%, what is the value of Maxwell Mining’s stock?
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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 D is $3 and rs is 10%, what is the value of Maxwell Mining’s
stock?
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