A drug company stock is currently selling for 15 per share, Ask an Expert

Finance

A drug company stock is currently selling for $15 per share. It pays an annual dividend of $1.50, equal to 50% of earnings. Retained earnings are invested in research with a average return of 20% per year.

A. Using the constant-growth divident discount model, what is the expected rate of return on the stock?

B. If the company raises the dividend to $3, what would the price of the stock be?

C. If the company eliminated the dividend, what would the stock price be?

2. what is the current foreign exchange control regime foe China? Please also give the rationale for not making RMB fully convertible at this stage.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92750924

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