(yrs 1-8) 2.89
(yrs 9-10) 4.89
(yrs 11-24) 7.12
PAYOUT RATION:
(yrs 1-8) 0.25
(yrs 9-10) 0.37
(yrs 11-24) 0.41
Stocks Beta: 0.6
YTM on T-Bond: 2.9%
Stock Premium: 5.0%
Suppose the stock becomes less risky from an investor's view. Suppose beta is now 0.50.
If there are 80,000,000 shares outstanding, what is the impact on the market value of the firm?
