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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 408 Weeks Ago, 2 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
24.    Del Sarto’s Minuteman Novelties, Inc., (DSMN) expects its earnings to grow from a current (time 0) level of $2 per share to $4 per share over the coming year. After that, earnings are expected to grow at 10 percent per year for 5 years. The current price of the stock of DSMN is $20 per share. The stock is expected to increase in value by 50 percent over the next 3 years. DSMN’s dividend policy is to pay out 50 percent of each year’s earnings as dividends. DSMN’s marginal tax rate is 40 per- cent, and its average tax rate is 35 percent. Compute DSMN’s cost of internal equity capital.
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