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Caspian Sea Drinks needs to raise $76.00 million by issuing additional shares of stock. If the...

Caspian Sea Drinks needs to raise $76.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $1.83 next year, which will grow at 4.16% forever and the cost of equity to be 11.69%, then how many shares of stock must CSD sell?

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Answer #1

Value of Stock Next year dividend/(Discount rate-Growth rate) 1.83/(0.1169-0.0416) $ 24.30279 No. of Shares must Sold = 76000

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