Problem 9-10 Valuation of a declining growth stock Martell Mining Company's ore reserves are being depleted,...

Question

Question

Problem 9-10 Valuation of a declining growth stock Martell Mining Companys ore reserves are being depleted, so its sales are

Answer 1

Answer #1

Current price=D1/(Required return-Growth rate)

=(6*(1-0.1))/(0.11-(0.1))

=5.4/0.21

=$25.71(Approx).

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Answer 2

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