(Answered) 1nbspyou believe that a corporations dividends will grow 5

Management Studies

1. You believe that a corporation's dividends will grow 5% on average into the foreseeable future. If the company's last dividend payment was $5 what should be the current price of the stock assuming a 12% required return? Make sure to show your work.

2. If a corporation announces that it expects quarterly earnings to increase by 25% and it actually sees an increase of 22%, what should happen to the price of the corporation's stock if the efficient markets hypothesis holds, everything else held constant? Explain.

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Business Management, Management Studies

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