Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. (common stock valuation) dubai metro's stock price

(Common stock valuation) Dubai Metro's stock price was at $105 per share when it announced...

90.2K

Verified Solution

Question

Finance

image

(Common stock valuation) Dubai Metro's stock price was at $105 per share when it announced that it will cut its dividend for next year from $10 per share to $6 per share with additional funds used for expansion. Prior to the dividend cut, Dubai Metro expected its dividends to grow at a 7 percent rate, but with the expansion, dividends are now expected to grow at 10 percent. How do you think the announcement will affect Dubai Metro's stock price? a. What is the investor's required rate of return for Dubai Metro's stock? (Round to two decimal places.) b. What would be the price of Dubai Metro's stock if they cut the dividend to $6? (Round to the nearest cent.) c. How do you think Dubai Metro's stock price will react to the announcement? (Select from the drop-down menu.) If Dubai Metro were to cut the dividend, the price of the common stock will

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students