Crystal Glasses recently paid a dividend of $2.70 per share, is currently expected to grow at a constant rate of 5%, and has a required return of 11%. Crystal Glasses has been approached to buy a new company. Crystal estimates if it buys the company, its constant growth rate would increase to 6.5%, but the firm would also be riskier, therefore increasing the required return of the company to 12%. Should Crystal go ahead with the purchase of the new company?
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Home » Business » Crystal Glasses recently paid a dividend of $2.70 per share, is currently expected to grow at a constant rate of 5%, and has a required return of 11%. Crystal Glasses has been approached to buy a new company.