Sign In Sign Up Ask an AI advisor
liluzisquirt7378
liluzisquirt7378
04.10.2019 • 
Business

Milton glasses recently paid a dividend of $1.70 per share, is currently expected to grow at a constant rate of 5%, and has a required return of 11%. milton glasses has been approached to buy a new company. milton 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 milton go ahead with the purchase of the new company?
a. yes, because the value of the milton co. will increase by $3.17 per shareb. yes, because the value of the milton co. will increase by $2.56 per sharec. yes, because the value of the milton co. will increase by $4.59 per shared. no, because the value of the milton co. will decrease by $3.17 per share

Solved
Show answers

Ask an AI advisor a question

I want advice