D Question 23 3.34 pts 23, Xenon, Inc. will pay a dividend of $.50 (D)...
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D Question 23 3.34 pts 23, Xenon, Inc. will pay a dividend of $.50 (D) next year, which they will pay out of the $1.25 earnings per share that the company expects to make. This dividend is expected to grow at a super rate of 12 percent for two years, and then settle down to a constant growth rate of 4 percent from then on. The required rate of return for Xenon, Inc. common stock is 10 percent. Compute the price of the stock in two years (P2). Show your work in your uploaded document Upload choose a File D Question 24 5 pts 24. Suppose that you know that a company's stock price reacts inefficiently to earnings announcements. Draw a graph to demonstrate the sequence that occurs when this company's stock price over reacts to positive earnings news (as I demonstrated in class) and then explain what you would do to exploit this violation of semi-strong efficiency, Be specific in your answer as to how you strategy would work. Show your work in the uploaded document
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