Caifornia Clinics

California Clinics, an investor-owned chain of ambulatory care clinics, just give a dividend of $2 per share. The firms dividend is expected to defecate at a constant prescribe of 5% per course; andinvestors require a 15 % graze of return on the stock. 1. What is the stocks protect? E (Po) = Do x (1 + E (g)) / (R(Re)-E(g)) E (Po) = $2.00 x (1+ 0.05) / (0.15- 0.05) E (Po) = $2.00 x (1.05) / ( .1) E (Po) = $2.10 / .1 E (Po) = $ 21.00 There for the stock value is $21.00 2. Suppose the seek of the stock decreases, which causes the postulate say of return to fall to 13%.Under these conditions, what is the stocks value? E (Po) = Do x (1 + E (g)) / (R(Re)-E(g)) E (Po) = $2.00 x (1+ 0.05) / (0.13- 0.05) E (Po) = $2.00 x (1.05) / ( .08) E (Po) = $2.10 / .08 E (Po) = $26.25 The stock value will increase because of the pose of return to falling which is $26.25 3. Return to the original 15% necessary rate of return and assume a dividend growth rate estimate in crease to 7% per year, what is the stock value? agitate integrity growth investing is a lesson in the creator of combination returns. The chart equation below shows the new value with an increase of divided growth rate (Gapenski, 2008) E (Po) = Do x (1 + E (g)) / (R(Re)-E(g)) E (Po) = $2.00 x (1+ 0.07) / (0.15- 0.07) E (Po) = $2.00 x (1.

07) / (.08) E (Po) = $2.14 / .08 E (Po) = $ 26.75 There for the stock value is $26.75 4.Explain how severally of the foursome (4) fundamental factors that see the preparation and demand for coronation capital, and hence, saki rates, (namely productive opportunities, time preferences for consumption, risk, and infla! tion) affects the damage of money. Fundamental factors that affect the supply and demand for investment capital, and hence, kindle rates, (namely productive opportunities, time preferences for consumption, risk, and inflation) affects the cost of money. Investment opportunities is when the higher a profit a somebody may gain from a business the much interest rate a person can...If you want to gravel a full essay, order it on our website: OrderCustomPaper.com

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