MC supplies power to homes and businesses in Ottawa. Electricity prices are regulated in Ontario and regulators will not allow profits to grow at extraordinary rates. The firm is in a stable growth phase based on its size and area it serves. The firm’s beta is 0.75 and was stable over time. T-Bond rate is 7.5%, the current EPS is $ 3, dividend payout ratio (DPR) in year 2005 is 68% and the expected growth rate in earnings and dividends is 5%, the return on the TSX/S&P Composite Index is 13%. What is the value of MC?
MC supplies power to homes and businesses in Ottawa. Electricity prices are regulated in Ontario and...