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2 April, 15:36

High valley antiques would like to issue new equity shares if its cost of equity declines to 10.5 percent. the company pays a constant annual dividend of $1.60 per share. what does the market price of the stock need to be for the firm to issue the new shares

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  1. 2 April, 16:02
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    The price of the share would be calculated as -

    Price of share = Annual constant dividend / Cost of equity

    Given, cost of equity = 10.5 %

    Annual constant dividend = $ 1.60

    Price of share = $ 1.60 : 10.50 %

    Price of share = $ 15.238 or $ 15.24
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