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Hypnoeyes20 Hypnoeyes20
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3 years ago
Because of declining world-wide sales of its number one confection, the petit ourson, Bearsbum Confection announced today that it is suspending dividend payments on its preferred shares. The shares have a 4% annual dividend, have a par value of $100 and are cumulative. The next dividend would have been paid tomorrow (if it were not suspended). Analysts expect Bearsbum's profits to rebound strongly in the next year and half due to the introduction of a new line of sour gummy bear paws. As a result, analysts expect that Bearsbum will resume dividends in two years' time. What is the fair price for the shares today if investors require a return of 7%?

▸ $51.04

▸ $53.40

▸ $57.14

▸ $60.39

▸ $62.89
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
Authors:
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SlamboSlambo
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3 years ago
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Hypnoeyes20 Author
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3 years ago
Correct Slight Smile TY
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