Please answer questions 8 and 9! Thank you :) Question 8 (7 points)...
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Please answer questions 8 and 9! Thank you :)
Question 8 (7 points) The stock of Robotic Atlanta Inc. is trading at $31.59 per share. In the past, the firm has paid a constant dividend (i.e., g 0) of $4.07 per share and it has just paid an annual dividend (i.e. DO 4.07). However, the company will announce today new investments that the market did not know about. It is expected that with these new investments, the dividends will grow at 7.2 96 forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? (Round your answer to 2 decimal places and record your answer without dollar sign or commas). Your Answer: Answer Question 9 (6 points) One of the basic relationships in bond pricing is that, other things held constant, for a given change in the required rate of return (i.e, the yield to maturity), thethe time to maturity, thethe change in price. Longer; smaller Longer: larger Longer; smaller or larger (depending on the coupon rate) Longer; smaller or larger (depending on the number of years to maturity) None of the above combinations is correct
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