Price for the Stock Assignment | Homework For You

Cape Corp. will pay a dividend of $3.40 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever.Homework For You
a. If you want a return of 15 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. If you want a return of 9 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only individual voting for you.
a. If the company has 590,000 shares outstanding and the stock currently sells for $29, how much will it cost you to buy a seat if the company uses straight voting? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
b. Assume that the company uses cumulative voting and there are three seats in the current election; how much will it cost you to buy a seat now? (Do not round intermediate calculations and round your answer to the nearest whole number. Get Finance homework help today

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