Carnes Cosmetics just paid a $5 dividend. Company sales are falling, as the industry is slowly declining- As a result the firm plans to decrease dividends by 3% per year indefinitely. If investor's required return is 10%, what is the value of Carnes common stock today?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Carnes Cosmetics just paid a $5 dividend. Company sales are falling, as the industry is slowly declining-
As a result the firm plans to decrease dividends by 3% per year indefinitely. If investor's required return
is 10%, what is the value of Carnes common stock today?
XYZ issued $1000 par value bonds with 21 years remaining to maturity. Interest is paid annually, the
coupon rate is 8% and the bond's YTM is 11%. What is the bond's current price?
Transcribed Image Text:Carnes Cosmetics just paid a $5 dividend. Company sales are falling, as the industry is slowly declining- As a result the firm plans to decrease dividends by 3% per year indefinitely. If investor's required return is 10%, what is the value of Carnes common stock today? XYZ issued $1000 par value bonds with 21 years remaining to maturity. Interest is paid annually, the coupon rate is 8% and the bond's YTM is 11%. What is the bond's current price?
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