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  3. part a. (25 marks) (i) mat enterprises, a new ze

Part A. (25 marks) (i) Mat Enterprises, a New Zealand owned company, common...

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Finance

Part A. (25 marks)

(i) Mat Enterprises, a New Zealand owned company, common stock currently sells for

$22.50 per share. The companys executives anticipate a constant growth of 10 percent

and an end of year dividend of $2.

You are required to compute the following:

(a) What is Mats expected rate of return if she buys the stock for $22.50? (5 marks)

(b) What is the value of stock to Mat and if Mat requires a 17 percent return, should he

purchase the stock? (5 marks)

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