Caspian Sea Drinks needs to raise $34.00 million by issuing additional shares of stock. If the market estimates CSD wil...
Homework Answers
| Step-1:Current share price of stock | |||||||
| As per dividend discount model, | |||||||
| Current share price | = | D1/(Ke-g) | Where, | ||||
| = | $ 14.79 | D1 | = | $ 1.35 | |||
| Ke | = | 14.12% | |||||
| g | = | 4.99% | |||||
| Step-2:Number of shares to be issued | |||||||
| Number of shares to be issued | = | Total amount needed | / | Value per share | |||
| = | $ 3,40,00,000 | / | $ 14.79 | ||||
| = | 22,99,407 shares | ||||||
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