Company Z stock currently sells for $40. The required return on the stock is 8%. Company Z maintains a constant 5% growth rate in dividends. Calculate the most recent dividend. What is the dividend yield?
Company Z has an investment opportunity costing $4 million today and providing cash flows $1 million, $2 million and $2,5 million for 1, 2 and 3 years from now respectively. If the required return of the project is 8% what is the Net Present Value (NPV) of this project? Would you accept this project?