Cooperton Mining just announced it will cut its dividend from $3.85 to $2.73 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.2% rate, and its share price was $48.68. With the planned expansion, Cooperton's dividends are expected to grow at a 4.9% rate. What share price would you expect after the announcement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment? D The new price for Cooperton's stock will be $ (Round to the nearest cent.) Is the expansion a good investment? (Select from the drop-down menu.) Ya good investment.
Cooperton Mining just announced it will cut its dividend from $3.85 to $2.73 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.2% rate, and its share price was $48.68. With the planned expansion, Cooperton's dividends are expected to grow at a 4.9% rate. What share price would you expect after the announcement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment? D The new price for Cooperton's stock will be $ (Round to the nearest cent.) Is the expansion a good investment? (Select from the drop-down menu.) Ya good investment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Cooperton Mining just announced it will cut its dividend from $3.85 to $2.73 per share and use the extra funds to expand. Prior to the announcement,
Cooperton's dividends were expected to grow at a 3.2% rate, and its share price was $48.68. With the planned expansion, Cooperton's dividends are
expected to grow at a 4.9% rate. What share price would you expect after the announcement? (Assume that the new expansion does not
change Cooperton's risk.) Is the expansion a good investment?
The new price for Cooperton's stock will be $. (Round to the nearest cent.)
Is the expansion a good investment? (Select from the drop-down menu.)
a good investment.
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