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The CEO of Harding Media Inc. as asked you to help estimate its cost of common equity. You have obtained the following data: D0 = $0.85; P0 = $22.00; and g = 6.00% (constant). The CEO thinks, however,
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The CEO of Harding Media Inc. as asked you to help estimate its cost of common equity. You have obtained the following data: D0 = $0.85; P0 = $22.00; and g = 6.00% (constant). The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $40.00. Based on the DCF approach, by how much would the cost of common from reinvested earnings change if the stock price changes as the CEO expects? Select one: a. -1.49% b. -1.66% c. -1.84% d. -2.03% e. -2.23%

User Nikolasleblanc
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1 Answer

3 votes

Your answer is:

A. -1.49%

Hope this helps XD

User Omar Abdan
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