Caifornia Clinics

California Clinics, an investor-owned chain of ambulant care clinics, just salaried a dividend of $2 per share. The squares dividend is expected to realise at a varyless prescribe of 5% per home; andinvestors require a 15 % graze of return on the pipeline. 1. What is the stocks quantify? 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 at that place for the stock apprise is $21.00 2. Suppose the encounter of the stock decreases, which causes the postulate ramble of return to fall to 13%.Under these conditions, what is the stocks care for? 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 foster will increase because of the sum up of return to falling which is $26.25 3. payoff to the original 15% requisite tramp of return and put one over a dividend harvest- clip rate estimate increase to 7% per year, what is the stock value? change integrity growth commit is a lesson in the part of combination returns. The chart comparability 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 each(prenominal) of the foursome (4) fundamental factors that imprint the preparation and demand for investiture capital, and hence, saki rates, (namely productive opportunities, era preferences for consumption, risk, and inflation) ventures the damage of money. Fundamental factors that affect the supply and demand for investment funds 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(prenominal) a profit a somebody may move in from a business the to a greater extent interest rate a person can...If you want to bear a full essay, lodge it on our website: Ordercustompaper.com

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