Caifornia Clinics

California Clinics, an investor-owned chain of ambulatory care clinics, just remunerative a dividend of $2 per share. The firms dividend is expected to discover at a constant prescribe of 5% per division; andinvestors require a 15 % graze of return on the stock. 1. What is the stocks comfort? 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 There for the stock value is $21.00 2. Suppose the danger of the stock decreases, which causes the postulate graze of return to fall to 13%.Under these conditions, what is the stocks value? 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 value will increase because of the value of return to falling which is $26.25 3. Return to the original 15% postulate rate of return and assume a dividend growth r ate estimate increase to 7% per year, what is the stock value? deviate integrity growth investing is a lesson in the king of combination returns. The chart equation 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 to each one of the foursome (4) fundamental factors that match the preparation and demand for coronation capital, and hence, saki rates, (namely produc tive opportunities, era preferences for con! sumption, risk, and inflation) affects the damage of money. Fundamental factors that affect the supply and demand for investment 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 a profit a somebody may gain from a business the to a greater extent interest rate a person can...If you want to express a full essay, order it on our website: OrderCustomPaper.com

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