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REH​ Corporation's most recent dividend was $ 2.56 per​ share, its expected annual rate of dividend...

REH​ Corporation's most recent dividend was $ 2.56 per​ share, its expected annual rate of dividend growth is 5​%, and the required return is now 15​%. A variety of proposals are being considered by management to redirect the​ firm's activities. Determine the impact on share price for each of the following proposed actions.

a.  Do​ nothing, which will leave the key financial variables unchanged.

b.  Invest in a new machine that will increase the dividend growth rate to 9​% and lower the required return to 11​%.

c.  Eliminate an unprofitable product​ line, which will increase the dividend growth rate to 9​% and raise the required return to 19%.

d.  Merge with another​ firm, which will reduce the growth rate to 2​% and raise the required return to 19​%.

e. Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to  8% and increase the required return to 19​%.

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jeff jeffy answered 7 months ago
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